Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — WALES

Employment (Non-British Firms)

Sir A. Meyer: asked the Secretary of State for Wales if he can give an estimate of the number of jobs created since June 1970 by non-British-owned firms establishing themselves or expanding their activities in Wales.

The Secretary of State for Wales (Mr. Peter Thomas): Since June 1970, 16 non-British firms have either set up manufacturing businesses in Wales or announced a firm intention of doing so. Nearly 1,900 jobs have already been created and a further 1,750 are expected to arise. Most non-British firms which are already established are expanding their activities.

Sir A. Meyer: Does my right hon. and learned Friend expect that the number of jobs thus created by non-British firms will continue to increase in the light of the expansion of the European Economic Community? Is there not a risk that that process may be arrested or even reversed if the Labour Party carries out its threats of directing industry? Is a policy of directing industry conceivable without the accompanying direction of labour?

Mr. Thomas: I am certainly convinced that our membership of the EEC greatly increases the attractiveness of Wales as a location for international investment. I agree that the direction of industry would hardly be an inducement as there is a risk of a spillover to the direction of labour.

Mr. Kinnock: Why does not the right hon. and learned Gentleman dismiss the uninformed nonsense spoken by his hon. Friend the Member for Flint, West (Sir A. Meyer)? Does he not recognise that the whole of Wales welcomes the inflow of foreign-owned firms? However, our record is not so good when compared with that of Scotland. Will the right hon. and learned Gentleman take further step to try to encourage the inflow of foreign-owned firms, and especially Japanese-owned firms, into Wales? Japanese firms have a developing record here. I am sure that the right hon. and learned Gentleman's office could be of great assistance in this matter.

Mr. Thomas: It is now clear that our regional and industrial policies are providing an incentive for home-based and foreign firms to come to Wales. The hon. Gentleman will be aware that Sony has decided to invest in Wales. I shall be meeting Japanese representatives shortly in Wales to discuss further investment.

Mr. Fred Evans: Will the right hon. and learned Gentleman tell the House, in view of the statement made by the hon. Member for Flint, West (Sir A. Meyer), whether any thinking is going on in the Welsh Office about the possibility of guiding State-owned or State-supported enterprises into regions like Wales? The right hon. and learned Gentleman will be aware that in areas such as Wales there are long-standing problems. The population of Wales would welcome direction of industry to cure its ills.

Mr. Thomas: As the hon. Gentleman knows only too well, the Welsh economy is greatly dependent on State-supported enterprises. The Government have indicated their support of both steel and coal, knowing full well how much the Welsh economy depends on those two industries.

Labour-intensive Industry

Mr. McBride: asked the Secretary of State for Wales to what extent he has examined the need for more labour-intensive industry in Wales.

Mr. Peter Thomas: The Government encourage all types of industrial development in Wales.

Mr. McBride: Would the right hon. and learned Gentleman say how many jobs will be lost to Wales when the regional employment premium is phased out in 1974 by order of the EEC? Has he had consultations with the Welsh CBI and the trade union movement about offsetting the forecast immediate loss of jobs in Wales? Is he aware that the present great need of Wales, a need which will continue for some years, is for labour-intensive industries? The Secretary of State will be judged by his actions and not by his words. What will he do about this matter?

Mr. Thomas: I agree that labour-intensive industries make a valuable contribution. I am sure that the hon. Gentleman will not overlook the need that Wales has for modern technological industry. What we need in Wales is a balance.

Mr. Barry Jones: The right hon. and learned Gentleman knows that labour-intensive industries supply many apprenticeships in Wales. Many apprenticeships in the steel industry will be lost in the years to come. What steps is the right hon. and learned Gentleman taking to ensure that the young people of Wales will have more and not fewer apprenticeships in new industries?

Mr. Thomas: The hon. Gentleman has a later Question to my right hon. Friend the Secretary of State for Employment about apprenticeships in Wales.

Newport (Development Area Status)

Mr. Roy Hughes: asked the Secretary of State for Wales what representations he has received from the county borough of Newport concerning development area status for the town; what reply he has sent; and if he will make a statement.

Mr. Peter Thomas: I have received no recent representations on development area status from the county borough of Newport.

Mr. Hughes: Does the right hon. and learned Gentleman appreciate that Newport has the finest communications network in Wales but that, coinciding with this, there have been two major closures, the docks are to lose 3 million tons of iron ore trade annually and many hundreds of redundancies have been declared in various establishments throughout the

town? What is the intention of the Government towards Newport? Is it to turn it into some sort of a glamorous Clapham Junction with all industry going elsewhere?

Mr. Thomas: I do not think that the hon. Gentleman does any service to Newport by painting a gloomy picture. I am aware of the arguments of Newport for development area status, and the status of all assisted areas is kept under review. I remind the hon. Gentleman that the unemployment rate in Newport is below the average for Wales and significantly lower than the average for the Welsh development areas. There has been an appreciable decline in the unemployment rate over the past 12 months.

House Prices

Mr. Alec Jones: asked the Secretary of State for Wales what were the average prices of new and old houses in Wales in June 1970; and what are the figures at the latest available date.

The Minister of State, Welsh Office (Mr. David Gibson-Watt): During the 12 months ending 30th June 1970, the average price of a new house mortgaged with a building society in Wales was £4,436, and a secondhand house £4,216. Comparable figures for the 12 months ending 31st December 1972 were £5,983 and £5,909. These figures are based on a 5 per cent. sample, which is too small for a reliable monthly figure.

Mr. Jones: Does not the hon. Gentleman agree that these figures are scandalous examples of property exploitation? Is he prepared to give advice to the young couples of Wales, anxious to find and buy a home for their families, on how to afford these very high figures and the equally high mortgage rates?

Mr. Gibson-Watt: Many young couples today look to our older housing stock to provide their first house, often taking the opportunity to improve their new home with the generous grants available. The hon. Gentleman should not forget that we have done away with the rationing of local authority home loans which was imposed by the Labour Government. Local authorities in Wales may lend freely for the purchase of older houses.

Mr. Rowlands: The hon. Gentleman should come to any one of our surgeries on a Saturday morning and see the problems at first hand. He talks about people buying unimproved older houses but is he not aware that these are now £2,500 to £3,000 when once they were £1,000 and that with the grant they go up to £4,500 or £5,000? Is he not further aware that large numbers of young families are virtually homeless, their homelessness concealed only by the tact that they are often living in their parents' front room, which creates tension and marital difficulties?

Mr. Gibson-Walt: I know that there is a problem, but house prices in Wales have risen by far smaller percentages than in the United Kingdom as a whole.

Mr. George Thomas: That complacent reply is offensive to the people of Wales. Is not the hon. Gentleman aware that the Government have simply replaced the old scheme of local authority loans by rationing by the purse, with the result that only those with a very high income are now able to buy a home in Wales?

Mr. Gibson-Watt: The right hon. Gentleman is wrong if he suggests that I am complacent. I said earlier that there were certainly problems but I was pointing out that fortunately in Wales the comparative figures are rather better than they are in England.

EEC Regional Policy

Mr. Denzil Davies: asked the Secretary of State for Wales what discussions his Department has had with the officials of the Commission of the EEC on the effect of the Community's proposed regional policy on the Welsh economy.

Mr. Peter Thomas: My hon. Friend the Minister of State had a most useful discussion recently with the European Commissioner responsible for regional policy. My officials have frequently had talks with staff of the Commission on regional policy issues. I myself plan to visit Brussels soon for further discussions.

Mr. Davies: Since Wales is suffering from a lower per capita income than most member States which participate in the common agricultural policy, will the right hon. and learned Gentleman make

it clear in Brussels that the whole of Wales without exception must qualify for the highest level of financial assistance under any proposed regional policy laid down by the Commission?

Mr. Thomas: All these matters will be discussed when I go to Brussels.

Mr. Hooson: Has the right hon. and learned Gentleman obtained an undertaking from the Commission that Wales will be recognised as a region for the purposes of the regional policy? Secondly, with the example of Bavaria in mind, would it not be advantageous to Wales to have a separate office in Brussels?

Mr. Thomas: I do not know what the hon. and learned Gentleman means by his words "recognised as a region". Wales is recognised as a separate part of the United Kingdom and makes representations to the Commission. The question whether all parts of Wales will be regarded as being peripheral or central has yet to be discussed and the consultative document has not yet been prepared and issued by the Commission.

Mr. Roderick: Is the right hon. and learned Gentleman satisfied with the common agricultural policy? If not, how long does he foresee its being continued?

Mr. Thomas: The Question on the Order Paper was about regional policy. If the hon. Gentleman wants answers about agricultural matters, perhaps he will put down a Question himself.

Infrastructure (Wrexham)

Mr. Ellis: asked the Secretary of State for Wales if he is satisfied with the infrastructure at Wrexham, in view of the proposed expenditure of £1·3 million to develop the Wrexham industrial estate.

Mr. Peter Thomas: A number of important infrastructure projects assisting industrial development in the Wrexham area are in progress or being planned. All will help to increase the attractiveness of the estate to industrialists.

Mr. Ellis: Is the right hon. and learned Gentleman aware that it is the unanimous and strongly held view among industrialists, trade unionists and local authorities in Wrexham that the biggest single factor influencing the success of


the proposed new development would be adequate connections with the motorway system of Great Britain? Will he therefore consult the Secretary of State for the Environment with a view to getting adequate connections to the motorway network—say, near Nantwich?

Mr. Thomas: I am aware that there is anxiety in the Wrexham area about the communications system but, as the hon. Gentleman knows, a lot is being done. I am fully aware of the views being expressed. Work on the Wrexham bypass, at a cost of about £4 million, should be completed by the end of the year, and schemes to improve the A483 are being prepared. These works will provide better access to the motorways and trunk roads. Other schemes of improvement are being considered. It is important that everything possible should be done to make the expansion of the industrial estate at Wrexham a success.

Sir A. Meyer: In this matter, as in others, is not the hon. Member for Wrexham (Mr. Ellis) more likely to be right than the hon. Member for Newport (Mr. Roy Hughes)?

Mr. Thomas: Perhaps I can say that (he hon. Member for Wrexham (Mr. Ellis) always appears to me to express the anxieties of his constituents most fairly and most forcibly.

New Town (Llantrisant)

Mr. Probert: asked the Secretary of State for Wales if he has received the inspector's report on the inquiry into the proposals for a new town at Llantrisant.

Mr. Peter Thomas: No, Sir.

Mr. Probert: Does not the Secretary of State agree that, whatever the contents of that report may be when he has received it, he should examine now with extreme caution any proposals for a new town at Llantrisant in view of the thousands of projected jobs lost or likely to be lost at Ebbw Vale and Cardiff and the consequent loss of jobs in the Valley communities if such a scheme were to go ahead?

Mr. Thomas: Complex issues are involved. I shall take my decision on Llantrisant when I have received and studied the report of the public local inquiry.

Mr. John: Does not the strategy of the Welsh Office in this matter as in so many others now depend on the talks that the right hon. and learned Gentleman is to have in Brussels about regional policy? Are we to understand his previous answer to mean that different areas of Wales arc to be classed differently—in other words, that there will be some central areas of Wales which will not qualify for regional aid and some peripheral areas which will? Can he assure us that all Wales will be treated in like case?

Mr. Thomas: I am sure the hon. Gentleman tries to be helpful but he is being singularly unhelpful because the negotiations have not even started yet. The Commission has not yet produced a consultative document. Once it is produced, that document will then have to be discussed by the various institutions. After that, there will be a final document for discussion and negotiations will start. Until a decision has been taken, it is impossible for me to give an answer such as the hon. Gentleman asks for.

Mr. Alec Jones: Would not the right hon. and learned Gentleman agree that the best news that he could announce for the Valleys of South Wales is an immediate decision to abandon the Llantrisant project?

Mr. Thomas: If the hon. Gentleman expects me to agree to that, he must be very strange. I have not yet received the report.

Mr. George Thomas: Will the Secretary of State bear in mind when he receives the report that local authorities in Glamorganishire are deeply concerned about the proposed expenditure of over £300 million at Llantrisant since this money could be used to revive and strengthen older communities?

Mr. Thomas: I will certainly bear in mind all relevant considerations before arriving at a decision.

Severnside Study

Mr. Rowlands: asked the Secretary of State for Wales whether he will make a statement on the Severnside studies.

Mr. Gibson-Watt: My right hon. and learned Friend the Secretary of State for


the Environment will be making a statement on both the Sevemside and Humber-side studies later this week.

Mr. Rowlands: In that case will the Minister of State confirm substantial Press reports that the Sevemside concept has been abandoned because of the differences in population forecasts? If such differences are the reason for these policy changes, will he bear in mind that plans for Llantrisant new town were also based upon the same assumptions?

Mr. Gibson-Watt: I am not responsible for newspaper reports. I am afraid that the hon. Gentleman, like, everyone else, must await the Secretary of State's statement later this week.

Mr. Abse: While the Minister may expect us to wait, does he appreciate that those who are living in northern Monmouthshire and are vitally concerned as a result of the steel run-down are not prepared to wait too long to hear what the Minister has to say about strategic planning and future capital investment in Wales? If he and the Welsh Office continue to dither over the new town and put hundreds of millions of pounds there or contemplate putting them on the other side of the Bristol Channel, what hope is there for dealing with the infrastructure needs of northern Monmouthshire which so desperately require attention?

Mr. Gibson-Watt: I understand the hon. Gentleman's concern. He will not have long to wait. The statement will be made later this week.

Improvement Grants

Mr. Abse: asked the Secretary of State for Wales whether, in the light of the Monmouthshire census figures on housing amenities, he will now announce an extension of the date up to which 75 per cent. improvement grants may be obtained.

Mr. Gibson-Watt: The time limit for 75 per cent. grants has recently been extended until June 1974.

Mr. Abse: Is the Minister aware that he has ignored the point which I put to him about the Monmouthshire figures? Is he further aware that throughout the area, particularly in northern Monmouthshire, the number of houses lacking basic amenities is still appalling? Does he

appreciate that despite the efforts being made by gallant townships such as Blaenavon it is quite clear that it will take a long time to get houses up to the required standard? Why should he put a brake upon the efforts of Blaenavon and other towns which know that they have to stop at a certain time if they are to get the work done? Why not give them encouragement by having a long-term forward date to which they can work to make their towns as good as any new town?

Mr. Gibson-Watt: The hon. Gentleman has a curious idea of a brake. The Government have just passed another Act to extend this important improvement grant. I know the problem in his constituency. As for Blaenavon, the figures this year are very much better than they were last year. In 1972 452 grants were approved in the hon. Gentleman's constituency compared with 216 the year before. That is a definite improvement.

Mr. Kinnock: May I remind the hon. Gentleman that he appears for some peculiar reason to have confused the numbers of improved houses which he has given in past answers with the need for new housing in Wales? Will he put his answer to my hon. Friend the Member for Pontypool (Mr. Abse) in context? What we are talking about is housing lacking basic amenities. What he has talked about in the past is an extension of housing. Does he appreciate that there is a need for something more than a 12-month extension of an Act which only provides people with standards which in other parts of the country are accepted as being merely civilised?

Mr. Gibson-Watt: With respect to the hon. Gentleman, what I was saying on previous occasions was that the total in the public, private and improved sectors in 1968 was something like 26,000 and that last year, under a Conservative Government, it was 42,000.

Cesspits (Drowning Hazard)

Mr. John: asked the Secretary of State for Wales what representations he has received regarding the need for legislation to prevent deaths by drowning in unguarded cesspits.

Mr. Gibson-Watt: None. But following two such deaths last year the Welsh


Office wrote to all sewerage authorities in Wales reminding them of their responsibility for safety measures on their own installations and also of their duty under Section 39(l)(c) of the Public Health Act 1936 to ensure that private cesspits were adequately protected.

Mr. John: Does the Minister of State realise that there has recently been the death of a young child in a partially constructed cesspit? Does he not agree that there is an urgent need to consider further legislation because even two young lives lost so far this year is far too many? Does he not further agree that the guarding of cesspits which have been completed and those under construction is urgently needed to prevent these needless deaths?

Mr. Gibson-Watt: I join with the hon. Gentleman in regretting these tragic accidents. I do not believe that legislation is the cure. When the hon. Gentleman wrote to my right hon. and learned Friend on 28th October last he asked that the Welsh Office should draw the attention of local authorities to this danger. We have done this on two occasions since he wrote.

Council Rents

Mr. Coleman: asked the Secretary of State for Wales whether he is now in a position to indicate the total additional rent paid by local authority tenants in Wales during 1972 as a result of the Housing Finance Act, and estimate the further total increase to these tenants in 1973.

Mr. Gibson-Watt: No. Information about rent levels will be published by the Institute of Municipal Treasurers andAccountants later this year. It is too soon to make estimates about rent increases in 1973.

Mr. Coleman: Is the Minister aware that that is a shocking answer? Will be say whether, in the light of the assistance that the Government are giving to the building societies, the tenants of council houses and other rented accommodation in Wales can expect some aid to prevent rising rents? Will he further say that the economies foreshadowed by his right hon. and learned Friend in making the announcement about mortgages will not fall on housing in Wales?

Mr. Gibson-Watt: Tenants whose incomes are low and who are not able to afford increases in rent may well pay less rent as a consequence of the rent rebate scheme.

Mr. McBride: Does the Minister realise that these increases are unjustified and run contrary to the Government's counter-inflation policy? Is he so callous that he has entirely forgotten the tragedy which these rent increases cause in working-class households? Will he act in a humanitarian way and say that the Government will do away with the Act?

Mr. Gibson-Watt: The help given to tenants of the sort to whom the hon. Member refers will be far more substantial than before. The increase in the needs allowance for calculating rent rebates will mean that many tenants entitled to rebate will pay even less rent in future.

Sir A. Meyer: Is it not a fact that the Labour Party, for purely party political purposes, is deliberately spreading false ideas which are preventing a great many tenants who could claim the rebate from doing so?

Mr. Gibson-Watt: My hon. Friend is absolutely right. This does not really surprise me because the Labour Party has been doing that for the last 100 years.

Haverfordwest and Withybush Hospitals

Mr. Nicholas Edwards: asked the Secretary of State for Wales how many beds for children there are at present in the hospitals at Haverfordwest and Withybush; and how many beds for children are planned for the new general hospital to be built at Withybush.

Mr. Gibson-Watt: Twenty-four at the Pembroke County War Memorial Hospital, Haverfordwest; none in the Withybush annexe. Ten are proposed for the new Withybush Hospital.

Mr. Edwards: Would my hon. Friend agree that those figures explain the widespread anxiety in Pembrokeshire that children will have to be taken past the new hospital all the way to Carmarthen even if they are suffering from the most serious complaints? Will he undertake to look at this matter again and also at


the provision of pediatric consultants for the new hospital?

Mr. Gibson-Watt: I will certainly look at this matter. It is causing considerable concern to parents in Pembrokeshire. Following what my hon. Friend has said, I will take a further look at it.

Chronically Sick and Disabled Persons Act

Mr. Roderick: asked the Secretary of State for Wales what advice and assistance he is now giving to local authorities in Wales on the implementation of the Chronically Sick and Disabled Persons Act.

Mr. Gibson-Watt: General guidance on the Act was given to local authorities in 1970 and specific guidance on Sections 1 and 2 in September 1971. My Department is always ready to give any advice and help it can.

Mr. Roderick: Is not the hon. Gentleman ashamed of the record of some Welsh local authorities, indicated in The Times today? He was very concerned with the implementation of the Housing Finance Act. Will he show the same concern about the implementation of the Chronically Sick and Disabled Persons Act?

Mr. Gibson-Watt: I have been looking at the records of the two counties which the hon. Gentleman represents. I notice that the record of one of them has improved since last year but that the record of the other has got worse. It might well be that the hon. Gentleman should address his remarks to the county concerned. We in the Welsh Office have asked local authorities to submit returns by 30th April this year which will show the extent to which they have implemented Sections 1 and 2 of the Chronically Sick and Disabled Persons Act.

Mr. George Thomas: But is the hon. Gentleman aware that it is no good telling my hon. Friend that he should write to the Brecon county authority? The Welsh Office has a moral obligation in this matter. Welsh authorities should be doing more to implement the Act about which the House unanimously agreed.

Mr. Gibson-Watt: I assure the right hon. Gentleman that we have done every-

thing possible. A postal survey of every household in the county of Brecon has been instituted. A 100 per cent. house-to-house survey has been under way in Radnorshire since April 1972. However, I agree that publicity given to today's exchanges may well help.

Cardiff-Merthyr Road

Mr. Michael Roberts: asked the Secretary of State for Wales whether he is aware that since the completion of the first section of the Cardiff-Merthyr trunk road there has been a considerable increase in the number of heavy lorries passing through neighbouring residential areas such as Ty Wern Road; and if he has any proposals to alleviate the probem.

Mr. Peter Thomas: Yes, I am aware of a growth in traffic. But I am sure that the Cardiff City Council, which is the responsible highway authority for roads such as Ty Wern Road, will be keeping the position under review.

Mr. Roberts: Does my right hon. and learned Friend agree that the daily channelling of thousands of vehicles, many of them very heavy vehicles, to the entry point of the Cardiff-Merthyr trunk road is an example of the good of the majority being paid for by the suffering of the few? Will he investigate this matter with a view to bringing some relief to my constituents?

Mr. Thomas: I appreciate the concern which has been expressed. The roads in question are the responsibility of the Cardiff City Council. If it wishes to discuss the matter with the Welsh Office, I shall be glad to arrange a discussion.

Oral Answers to Questions — TRADE AND INDUSTRY

Oil Supplies

Mr. Edwin Wainwright: asked the Secretary of State for Trade and Industry, in view of the fact that experts are forecasting that the world's supply of oil will be below the demand for this fuel by the late 1980's, if he will have discussions with the chairmen of the nationalised fuel and power industries, and then report to Parliament before he gives his consent for the building of any more oil-fired power stations.

The Minister for Industry (Mr. Tom Boardman): My right hon. Friend and


I have periodic discussions with the chairmen of the nationalised industries and with the oil companies. World oil prospects are naturally one of the major matters discussed from time to time. Fuel supply prospects are taken into account in making decisions on the fuelling of stations when the electricity industry's capital investment programme is reviewed.

Mr. Wainwright: The hon. Gentleman has not said anything about the question of reporting any future policy to Parliament. Is he not aware that the 11 OPEC countries own at least 70 per cent. of the world's oil supplies, that they are now considering banking oil, thereby increasing its price, and that the needs of the world by 1985 will be greater than the supply? What will the hon. Gentleman do about it? What guarantee will he give to the coal industry that miners will be needed in the 1980's and 1990's? Does he not think it is time that something was done, with the Government declaring that Drax B should be a coal-fired power station?

Mr. Boardman: The hon. Gentleman must have forgotten the very great aid being given to the extra coal burn under the Coal Industry Act totalling up to £50 million, or £100 million, in the next three years to promote the sale of coal to the electricity boards.

Sir G. Nabarro: Does my hon. Friend realise that the coal industry in the United Kingdom has been run down much too far and too fast and that a coal output of 140 million tons is grossly inadequate for our needs? Will he set the objective of 300,000 men in the pits, added to an output of 175 million tons of coal, all by 1975, which would approximately meet our needs?

Mr. Boardman: My hon. Friend will recall that during the debates on the Coal Industry Bill we said that it was wrong to set objectives or targets for men or for output and that we should give the industry an opportunity to justify its size and the number of people employed with the help we were giving to it.

Mr. Varley: Is it not becoming obvious that the Government and the CEGB are getting in an appalling mess over power station policy? Is it not about time that the Minister took a more positive and active role in this matter? The Drax

B station was put in the programme in 1969 as a coal-fired power station. Why are not the Government doing something about that? In view of the Press speculation in the last few days that the Government are likely to refuse to sanction more oil-fired power stations, why does not the Minister make a definitive statement on power station policy?

Mr. Boardman: Planning consent for Drax B was given some time ago and it is up to the CEGB to decide whether it wishes to include it in its investment programme. However, the discussions with the chairmen of the fuel and power industries take into account the projections for fuel requirements. All these factors are fully taken into account.

Service Industries

Mr. Horam: asked the Secretary of State for Trade and Industry what is his estimate of the number of jobs in the service industries which have been created under the Industry Act grants to date.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): Many new job opportunities in the service industries arise indirectly from regional development grants provided to manufacturing, mining and construction industries, although service industry projects themselves are not eligible for such grants.

Mr. Horam: Is the hon. Gentleman aware that the service industries have been expanding at a much faster rate than manufacturing industries over the last year or two and that they are more labour intensive, yet the Government's regional incentives remain biased towards industrial investment? Will the Government do something about this imbalance?

Mr. Grant: The majority of service industries tend to follow increased manufacturing industrial activity, but mobile service projects which make a significant contribution to satisfying the employment needs of the assisted areas are eligible to be considered for regional selective assistance.

Dame Irene Ward: Is my hon. Friend aware that that is not a very satisfactory reply? We could do with much more


help in respect of the service industries. I am very pleased about help given to industrial development, but service industries are very important to the consumer and people would like more attention to be paid to them. May I have an assurance that whatever policy is necessary will be immediately put into operation by the Government?

Mr. Grant: I assure my hon. Friend that if a service project is capable of being mobile and can be attracted from a non-assisted area to an assisted area it is eligible for assistance. The criteria laid down are more liberal than they were under the old Local Employment Acts.

Mr. Millan: The hon. Gentleman says that service industries are eligible for selective assistance under the Industry Act. What we want to know is whether any projects have been helped under the Industry Act, because my impression is that absolutely nothing has happened in the last year or two.

Mr. Grant: Certain applications are being considered. If the hon. Gentleman wants further details, I can give them on another occasion.

China (Secretary of State's Visit)

Mr. Adley: asked the Secretary of State for Trade and Industry if he will make a statement following his recent visit to China.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Walker): I was accompanied on this visit by my hon. Friend the Minister for Aerospace and Shipping. The exhibition was the largest that has ever been staged by a foreign country in Peking. More than 350 firms displayed a wide range of goods particularly reflecting modern British technology. The exhibition has proved to be a major success. It was opened by the Chinese Minister for Foreign Trade and the exhibitors were paid the honour of a two-hour visit by the Prime Minister, Mr. Chou En-lai. I am sure that over the years ahead many orders will be placed with British industry as a direct result of the impact made by this exhibition. I would particularly like to express my gratitude to Sir John Keswick, president

of the exhibition, and to all those who contributed to its organisation.
I had a series of discussions with Chinese Ministers including a two-hour meeting with Mr. Chou En-lai. The meeting was cordial and the Chinese Prime Minister expressed the hope that trade and cultural relationships between our two countries would be increased. I had detailed discussions with the Chinese Minister for Foreign Trade and he accepted my proposal that our officials should draw up a programme for an exchange of trade missions between Britain and China over the next two years. He expressed his view that there would be an increase in British trade with China. I had further discussions with the Minister for Foreign Affairs. I also made visits to Hangchow and Shanghai where I visited a number of major Chinese industrial concerns and had discussions with those officials responsible for foreign trade in these areas. I believe that we can now look for a period of sustained growth in our trading relationships with China.

Mr. Adley: Is my right hon. Friend aware that all those in this country who are actively concerned with exports are very much encouraged by his personal involvement and commitment to this particular growth area of our overseas trade? May I ask him one specific question? Could he give an assurance with regard to exports of aerospace equipment to China that these will not be hampered in any way by the Americans or others trying to take advantage of previous commitments under which exports of large amounts of equipment could be categorised as strategic?

Mr. Walker: I believe that there is no danger of this particularly as at the moment the Americans are trying to negotiate large aircraft orders in Peking.

Mr. Benn: May I also congratulate the right hon. Gentleman on the success of his mission and pursue one of the points raised by the hon. Member for Bristol, North-East (Mr. Adley)? Can the right hon. Gentleman give an assurance that there are no restrictions on trade with China as there manifestly were 18 months ago—they were raised with me when I was in Peking—which would make it difficult for us to trade because


of some strategic limitations? Secondly, does the right hon. Gentleman have in mind any more formal arrangements with the Chinese, similar to those we have with the Soviet Union and many Eastern European countries?

Mr. Walker: On the latter question, I think there is advantage in trying to seek a constant relationship. There was no request by either the Chinese or ourselves for a more formal establishment of a commission. Certainly, if I thought that this would in any way improve trading relationships I would not hesitate to suggest such a formal relationship. The Chinese Foreign Minister will be visiting London, I hope, in the near future, and I think there will be a rapid exchange at both the ministerial and business levels. As for strategic limitations, certainly in matters of trade upon which I had discussions with the Chinese, and a whole range of industries, I do not see any particular problem of a strategic nature.

Mr. Wilkinson: May I also congratulate by right hon. Friend on his visit and ask whether there were any formal discussions about China's declaration of intent to purchase Concorde and whether discussions were held on the subject of routes for supersonic airliners between our two countries?

Mr. Walker: There were no discussions on routes, but on the subject of Concorde those remarks which were made struck me as being optimistic. During my visit I was assured that China had in no way changed her attitude to the aircraft since she signed the preliminary purchasing agreement last summer.

Mr. Dalyell: In what fields of trade were commissions contemplated? While welcoming the impact of the exhibition, may I ask whether a word could be put in for an exchange on agricultural technology?

Mr. Walker: Yes, I think that in the whole sphere of agriculture China is very interested in ways of fast developing her agriculture and this would be one of the spheres in which I would suggest an exchange. Other spheres of immense importance including mining engineering equipment. I would hope that some new firms being established in this country for offshore oil drilling off Britain

will realise that there will be considerable potentiality off China's coast in the years ahead and that there could well be further opportunities there.

Sir R. Cary: In view of what my right hon. Friend said about Concorde, can we accept that the orders for the three are firm?

Mr. Walker: One can never suggest, till an actual order is completed and paid for, that any order is a firm order, but certainly everything during the visit paid by myself and my hon. Friend the Minister for Aerospace tended to show that the Chinese were very interested in the Concorde aircraft and in no way had changed their view since they signed the original agreement.

Mr. Mason: Can the right hon. Gentleman tell us exactly what orders were achieved during the exhibition? Secondly, what are the trade prospects and in what fields as a result of the exhibition? Thirdly, is he seriously telling the House that he took the Minister for Aerospace along with him and they had no discussion about the establishment of a direct route from Heathrow to Peking involving BOAC and the Chinese Republic airlines?

Mr. Walker: On the latter point, there were certainly some conversations on the direct route. I am sorry, I misunderstood the question. There were discussions and these are continuing at the present time, but no conclusion was reached. As for actual orders received during the exhibition, I think the right hon. Gentleman will know from his experience of visiting China that this is not the sort of place where orders are immediately placed at the stands of the exhibition but that what happens is that those with products are invited to have talks with the various purchasing commissions. What resulted during the exhibition was that a large number of British firms were invited to enter negotiations and talks with the various purchasing commissions, and I have no doubt at all that a great deal of business will arise in the years ahead as a result.

Navigation (English Channel)

Mr. Kenneth Warren: asked the Secretary of State for Trade and Industry


when he expects the multi-national discussions on the safety of shipping navigating the English Channel will be completed.

Mr. Anthony Grant: Channel safety is a continuing problem. Informal discussions with a number of North-West European countries took place at the end of March and further meetings are planned, but we hope to complete this phase of consultation during the summer.

Mr. Warren: Bearing in mind that the English Channel is the busiest seaway in the world and that at present the whole navigational process is being conducted on the see-and-be-seen basis, does not my hon. Friend think it is a miracle that a major accident affecting our coasts has not occurred already? Does he not think it is time that the French and the Dutch were told by him that it is time the talking stopped and a safe separation system was introduced?

Mr. Grant: I assure my hon. Friend that the Government are very well aware of the urgency of this problem and, indeed, have all along been taking initiatives to achieve greater safety in the Channel. It is in that respect gratifying that there has been a great improvement in the last year as regards the extent of accidents which have taken place. The French and the Netherlands have to some extent been held back by general elections and not knowing which Ministers would be responsible, but I think I can assure my hon. Friend that they will accept our view that an urgent resolution in this matter is now necessary.

Companies (Political Donations)

Mr. Hugh Jenkins: asked the Secretary of State for Trade and Industry what was the total sum disclosed under the Companies Act 1967 of donations made by companies for political purposes in the years 1970, 1971 and 1972.

The Minister for Trade and Consumer Affairs(Sir Geoffrey Howe): This information is not available.

Hon. Members: Why not?

Mr. Jenkins: Does not the right hon. and learned Gentleman agree that it ought to be made available? Is he aware that most of this money finds its way into

the coffers of the Conservative Party and thus supports him and his hon. Friends, and would it not be a matter of public interest to know how much they are financed by companies which are simultaneously underpaying people abroad and at the same time undercutting international minimum standards? Is it not the case that a number of these companies which contribute to Conservative Party funds are the same companies as have been listed as underpaying people abroad? Do the right hon. and learned Gentleman and his hon. Friends feel that this is right, and do they enjoy being financed by money arising from such sources?

Sir G. Howe: I do not accept most of the premises of the hon. Member's extremely wide-ranging and multi-linked question. The provisions of the Companies Act 1967, passed by the Government which he supported, are in force and are being complied with. I do not consider that it would be a suitable use of officials' time or of public funds to produce the figures requested by him.

Sir G. Nabarro: Will my right hon. and learned Friend bear in mind that during the passage of this legislation two objectives were clearly stated and accepted by the then Government? The first was that we should have access to trade union funds used for subventions to the Labour Party, and that as a proper counterpart we should have available and published periodically such subventions as were available to the Tory Party and elsewhere for party political purposes. If my right hon. and learned Friend says now that the figures are not available, will he go to work and make them available?

Sir G. Howe: I am grateful to my hon. Friend for reminding me of the purposes of the legislation passed by the Labour Party. That legislation is being complied with to the full and the information required to be disclosed under the Companies Act 1967 is being disclosed in accordance with the requirements of that statute.

Mr. Benn: Was not the object of that legislation to make it known publicly how much money was going from business firms to a political party? Is not the


Minister, by declining to make this information available to the House, preventing that legislation from having its effect? Also, have there been any requests for refunds?

Sir G. Howe: There have been no requests for refunds. The information of the kind referred to by the statute is being made available publicly in precisely the way required by the statute. Other private enterprise publications, such as Labour Weekly, published by the Labour Party, do some additional research in gathering this material, but the material is now available exactly as required by the Act passed by the Labour Party.

North Sea Oil

Mr. Eadie: asked the Secretary of State for Trade and Industry if he will now consider the formation of a petroleum development board based on Scotland.

Mr. Anthony Grant: No, Sir. A Scottish Petroleum Office is being set up in Glasgow through which the new Offshore Supplies Office will discharge its responsibilities in Scotland.

Mr. Eadie: Is the hon. Gentleman aware that there is not one Scottish newspaper that is not critical of the Government's policy over North Sea oil? This has been sparked off by the bleatings of the Government's child, the Offshore Supplies Office, a leading official of which made a statement which should not have been made. Does not the hon. Gentleman think that it is now time that the Government had another look at the IMEG report which dealt with the setting up of a petroleum development board? Is he not satisfied that we need more than an offshore supply office and that we need to participate more in the finding and so on of oil?

Mr. Grant: With respect, I do not accept that. Nor do I accept that the Scottish newspapers are wholly in disagreement. The reason for the policy we took was that speed was of the essence and it was considered that one would get the necessary development far more quickly by operating through the Industrial Development Executive than by going through the process, which possibly would have required legislation, of having a separate board.

Mr. Douglas: How many members of the trade delegation from China are visiting London at present? Will the hon. Gentleman compare the visits which they will make to Scotland with a view to getting for this country orders from China for offshore supplies?

Mr. Grant: I could not give the figures without notice, but I believe that there should be increasing international interest in the opportunities for offshore equipment sales as a result of North Sea oil.

Mr. Edward Short: Why is one of the supply offices being based in London? Why is there not to be one in the North East?

Mr. Grant: As the White Paper explained, North Sea oil activity is, for geographical reasons, of greater concern to Scotland than to the North East, but we have recognised the interests of the North East by having an expert placed in our north-eastern office.

MR. NEIL McELLIGOTT

Mr. Kaufman: asked the Attorney-General if he will remove Mr. Neil McElligott from the list of magistrates.

The Attorney-General(Sir Peter Rawlinson): No, Sir.

Mr. Kaufman: Is the right hon. and learned Gentleman aware that Mr. McElligott's reputation for prejudicial and intemperate remarks in his court has been capped by a statement to a woman from the Lebanon who was before him for shoplifting that 75 per cent. of shoplifting cases in Marlborough Street court were by people from her part of the world, who came to this country simply to thieve? In view of the fact that the Home Office has told me that no statistics of this kind are available, and since this is a mass slander against millions of people, does the right hon. and learned Gentleman really say that such a man is fit to dispense justice?

The Attorney-General: The hon. Gentleman would perhaps like to be told about these statistics. In the three days immediately prior to 29th March there were 17 cases of shoplifting before the court, all of people of considerable means and ability to pay, all of whom came from the Near or Middle East—[An HON. MEMBER: "Out of how many?"]. Out


of a total of 29 cases. This case concerned a woman who had £90 on her and who had stolen about £9 worth of goods. This remark was made to defending counsel by the magistrate when he pointed out:
It seems that London has a fascination for them—people of considerable substance who just come here to thieve.
I consider what the magistrate said was justifiable.

Mr. Body: Is my right hon. and learned Friend aware that, among those who habitually prosecute and defend in the Metropolitan courts, there is scarcely a magistrate more highly regarded than Mr. McElligott?

The Attorney-General: I am glad to hear that from my hon. Friend.

DIVORCE (CUSTODY OF CHILDREN)

Mrs. Joyce Butler: asked the Attorney-General whether he will amend the law to ensure that, in determining the question of custody of children under divorce proceedings, a court shall regard the religion of the parties.

Mrs. Butler: On a point of order. Perhaps I might say, Mr. Speaker, that the Question contains a misprint. It should say that the court "shall not have regard to the religion of the parties".

The Attorney-General: In view of that amendment, the answer is, "No, Sir." In determining questions of custody, the courts are required to regard the child's welfare as the first and paramount consideration. For this purpose they take account of all the relevant circumstances of the case.

Mrs. Butler: Arising from a recent case in which a mother lost the custody of her three daughters because she was a Jehovah's Witness, is there not a grave possibility of religious prejudice affecting the happiness and welfare of the children concerned? Will the right hon. and learned Gentleman look at this again, because it is an important point?

The Attorney-General: What guides court must be, the question of what is in the paramount interests of the child. In the case to which the hon. Lady has referred, which I assume is the case of

Buckley v Buckley, it was pointed out among other considerations that the father's financial position was good, that the mother's was perilous and that the mother was a Jehovah's Witness, which tended to isolate the children—for instance, it made them ignore Christmas and forbade inoculations and blood transfusions. Taking all these matters into account—religion was only one of them —it was felt that it was in the best interests of the children that they should go, in this case, to the father.

PARA-MILITARY UNIFORMS

Mr. Judd: asked the Attorney-General how many prosecutions have taken place for the latest convenient period for the wearing of para-military uniforms.

The Attorney-General: None, Sir, either in Northern Ireland or in England and Wales, during the year ended 31st March 1973.

Mr. Judd: Will the right hon. and learned Gentleman accept that there is anxiety about the criteria used in deciding whether to bring prosecutions of this kind, particularly in Northern Ireland? Will he take an early opportunity to clarify the overall policy as regards this offence?

The Attorney-General: I can only tell the hon. Gentleman that there have been no prosecutions since the present Director of Public Prosecutions in Northern Ireland took over. This is primarily because such cases have not been submitted to him. There have, of course, been prosecutions for disorderly or riotous behaviour, but these matters are borne in mind and in each individual case in which there is such an exhibition and in which persons are wearing such uniforms, prosecutions will, I promise the hon. Member, be considered.

Sir Elwyn Jones: Is it therefore the case that the wearing of para-military uniform is now tolerated and will not be made the subject of proceedings? If that is right, is this being applied across the board as a principle?

The Attorney-General: No, Sir, that is not the case. Section 6 of the Public


Order (Amendment) Act (Northern Ireland) 1970 makes it an offence if any person wears a uniform signifying his association with any political organisation. But what the Director of Public Prosecutions has to take into account are matters such as the prosecution of many people, the numbers of people and of courts and the chance of getting the best consequence, namely, a conviction in any case. It is not a question of policy but of what is practically best in a particular circumstance.

CHURCH COMMISSIONERS (INVESTMENTS)

Mr. Driberg: asked the hon. Member for Chelsea, as Member answering for the Church Commissioners, what is the policy of the Church Commissioners with regard to their investments in South Africa; and to what extent they take into account the level of wages paid to African employees by British firms in South Africa when considering investment in such firms.

Mr. Marcus Worsley (Second Church Estates Commissioner representing Church Commissioners): It is the commissioners' long-standing policy not to own direct investments in South Africa or in companies operating wholly or mainly in that country. They take social as well as financial factors into account in the choice and management of all their investments.

Mr. Driberg: Does that answer the second part of my Question? Also, will the commissioners co-operate fully, if required, with the Select Committee of this House concerned with this matter, possibly by collecting evidence themselves from clergy still operating in South Africa or recently expelled thence, such as the former Dean of Johannesburg?

Mr. Worsley: The commissioners would, of course, co-operate with any Committee of this House, but that cooperation would have to be on matters which were the responsibility of the commissioners. I think that the hon. Gentleman's remarks go rather wider than that.

Mr. Alexander W. Lyon: Would the commissioners also take part in an operation to inquire from the boards of the

companies in which they have investments the pay and conditions of employees of their African subsidiaries, because the Church Commissioners could be vital in this respect?

Mr. Worsley: The commissioners, as I said in my original answer, always take social considerations into account; that would cover the hon. Gentleman's question.

MR. PETER NIESEWAND

Mr. Harold Wilson: (by Private Notice) asked the Prime Minister what action he proposes to take in respect of the secret trial of and sentence imposed on Mr. Peter Niesewand, a British citizen and correspondent in Rhodesia of British Press and broadcasting organisations.

The Prime Minister (Mr. Edward Heath): Mr. Peter Niesewand, the correspondent of the BBC and The Guardian newspaper in Rhodesia, was detained by the Rhodesian authorities on 20th February. My right hon. Friend the Foreign and Commonwealth Secretary immediately sent a message to Mr. Smith about this matter on 21st February, requesting information about the background, and asking whether it was the intention of the Rhodesian authorities that Mr. Niesewand should be tried. Mr. Smith replied that the detention was for security reasons and would be considered by the Judicial Review Tribunal.
Mr. Niesewand was subsequently charged under a section of the Rhodesian Official Secrets Act which refers to possession or communication of information likely to be of value to an enemy. No details of the charges have been published, nor do we know them. Mr Niesewand was tried in camera on 19th and 20th March. On 6th April he was sentenced to two years imprisonment with hard labour, one year to be suspended. I understand that it is his intention to appeal.
On 6th April my right hon. Friend the Foreign and Commonwealth Secretary sent a further message to Mr. Smith emphasising, in forthright terms, the great concern which is felt by everyone in this country at the secrecy surrounding Mr. Niesewand's trial and the charges


brought against him, and also at his continued detention without trial under the Rhodesian Emergency Powers Act. My right hon. Friend emphasised the concern felt in this country on humanitarian grounds about the position of Mrs. Niese-wand and their family. He urged the Rhodesian authorities to lift the detention order on Mr. Niesewand and allow him to leave the country.
We have not yet received a reply to that message. Her Majesty's Government deplore the fact that the Rhodesian authorities have held their entire proceedings in camera and have allowed no details of the charges to be known.
I know that the whole House will support me in taking this further opportunity of urging upon the authorities in Rhodesia the essential need for dealing with this case in the way Her Majesty's Government have proposed.

Mr. Wilson: On the facts so far available in this country, does it not appear that the charges, of which no public information is being given, relate to information concerning operations on the border which was already known to those whom Rhodesia considers to be enemies? Is it not further a fact that Mr. Smith said in respect of that information that it was untrue, and that, if untrue, it could hardly be an official secret?
Is it not further a fact not only that the Rhodesian soi-disant Government is an illegal Government but that the Judicial Committee of the Privy Council has ruled that the Rhodesian courts have no jurisdiction in Rhodesia? Does not the right hon. Gentleman feel that all the evidence points to a decision having been taken by the Rhodesian authorities and their courts that action of this kind is best designed to intimidate any journalists who want to get out the facts about Rhodesia?
While we would all maintain that there is no difference between action of this kind against white citizens and action already taken against African citizens, is it not a fact that this case has brought home to Smith's friends in this country, including the Press, that we on this side of the House—and, I believe, Her Majesty's Government—have been right to insist on full human rights in any settlement there may be, and that last

week's events again more strongly underline the need for safeguards in such a settlement?
The right hon. Gentleman has mentioned the question of an appeal, but this appeal will, of course, if it is granted, be to an illegal court and an unconstitutional court, some of whose rulings are not in accordance with British conceptions of justice, and under the laws of this House we are responsible for Rhodesia. But even if, as both sides in the House have had to admit, our views have not been enforceable, would the right hon. Gentleman consider the proposal made by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) that the Attorney-General should be sent to Rhodesia or, if not the Attorney-General, one of the Prime Minister's negotiators who prepared the way for the plan that was turned down by the people of Rhodesia last year, to represent the strong views held by parties in the House and by all sections of the community here?
If there were no response to that action, would the Prime Minister take note of the proposal made by my hon. Friend the Member for Islington, East (Mr. John D. Grant) that the world Press, outraged as is the British Press by this decision—[HON. MEMBERS: "Too long."]—the sentence imposed is too long; that is why I am being too long— that the world Press, outraged as is the British Press, could play its part now in all the countries which are sanction-breaking, producing the evidence of sanction-breaking and bring this home to Mr. Smith in perhaps the only way he will recognise?

The Prime Minister: As I said in my statement, we have no knowledge of the charges or the information which may have been produced in the court, so I do not think that I am able to comment on the opening part of the right hon. Gentleman's remarks.
As for the second part of his remarks, my right hon. Friend told the House on 21st March that we have in addition on previous occasions made protests to Mr. Smith about the detention of members of the ANC.
As for the last part of the right hon. Gentleman's question, suggesting that


the Attorney-General or another representative of Her Majesty's Government should visit Salisbury, I have noted the proposal made by his right hon. Friend and by others. We would naturally wish to be in the position to make the strongest possible representation to Mr. Smith, but at the same time we have to be realistic, as the right hon. Gentleman was realistic, and to recognise that we could not do this unless there were cooperation by the authorities in Rhodesia. I think the House will feel that what is required is that the nature of the charges should be made public, and not just conveyed to Her Majesty's Government privately, with Her Majesty's Government's hands being tied and our not being able to tell the House.

Mr. Nigel Fisher: In view of the very severe sentence and the great secrecy that surrounds it, will my right hon. Friend confirm that he will proceed with the utmost caution in any future negotiations with Mr. Smith? Also, can he tell the House that in his own mind the validity of the proposition that there will be no such settlement without the consent of the people of Rhodesia as a whole still applies to Government policy?

The Prime Minister: We have always proceeded with great caution in the matter of negotiations, and my hon. Friend will probably agree that the great length of time which has been taken over them is proof of that. As to the last part of my hon. Friend's supplementary question, that still remains the position.

Mr. Grimond: I must first declare an interest, as I am a trustee and director of The Guardian and the Manchester Evening News. Is the Prime Minister aware that I therefore wholly support the protests being made, and hope that they will be pressed to the utmost?
Is the Prime Minister also aware that while this case has attracted a great deal of attention because it is about a journalist, there are many African people who are detained or in prison? I have only to mention Mr. Nkomo, and Mr. Garfield Todd who is still under restraint. It would be wholly wrong and damaging to the country if it should appear that all our attention was focused on this journalist when there are black Africans who have been in prison and

detention for years. Will he add these to his protests?

The Prime Minister: I entirely agree with the purport of the right hon. Gentleman's question. That is why I mentioned in reply to the Leader of the Opposition that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has on previous occasions protested to the authorities in Rhodesia about the detention of Africans and others.

Mr. Hastings: While nothing can ex-cuse secret trials and charges and sentences, will my right hon. Friend recognise that those of us who have known Rhodesia for a long time and have sought to defend her interests in this country, and who regard much of the criticism in this country as both hypocritical and prejudiced, will be deeply disappointed and dismayed by this trial, particularly at the present time? Nevertheless, will my right hon. Friend not agree with me that the best insurance against the continuance of practices of this kind is to press on with every attempt to reach a settlement as soon as possible?

The Prime Minister: I thank my hon. Friend for what he said. It bears out the last part of my statement urging upon Mr. Smith the need to settle the matter in the way that this House has suggested.

Mr. Alexander W. Lyon: Will the Prime Minister consider issuing Bishop Muzorewa and Mr. and Mrs. Chinamano with Press cards rather than with British passports, because they seem to be much more effective?

The Prime Minister: I have always respected the hon. Gentleman's integrity, but I think that that is a little unfair. I have said already that, although no great publicity may have been given to it, this Government have consistently made representations to Mr. Smith about the detention of members of the ANC, especially the more recent cases.

Mr. Haselhurst: Does not the Smith régime's handling of this case make it clear that if there is to be a settlement of the Rhodesian question the terms will have to be made more severe than anything that we have contemplated hitherto, and should not this point be made clear now to the Smith régime?

The Prime Minister: This case and the others which have taken place recently damage the possibilities of getting a settlement of the Rhodesian question. Whereas some of us had hoped and thought that we saw indications of possibilities of talks between the ANC and the authorities in Rhodesia, instances of this kind make this infinitely more difficult. On the other hand, I think that my hon. Friend will recall that the last proposals contained provisions for safeguarding human rights. It is essential that these be maintained.

Mr. Paget: Can the right hon. Gentleman answer these questions? Has this gentleman been sentenced by a pre-UDI judge appointed by Her Majesty under the law existing before UDI, and under a procedure including trial in camera existing under the Official Secrets Act both in Rhodesia and in this country? If that is so, is it a very good example for the Press thesis that correspondents are a priestly caste above the law to raise this agitation about this case when the charge against Mr. Smith is that he has failed politically to intervene in judicial proceedings subject to appeal?

The Prime Minister: We do not have the information which would allow me to answer the first part of the hon. and learned Gentleman's question. On the second part of his question, I hope that any Government of this country would regard themselves as obliged in every respect to safeguard the interests of those subjects for whom they are responsible. Mr. Niesewand is a Rhodesian citizen— he is not a British citizen—but this House and this Government have responsibilities for Rhodesian citizens.

Mr. Crouch: As one who has supported my right hon. Friend through thick and thin in respect of the six principles for possible solution in Rhodesia, may I suggest that perhaps we should now introduce a seventh principle which will protect those who legally are British citizens against the repressions of an illegal police State?

Mr. Faulds: Is this incident not a clear revelation of the real nature of the

Rhodesian régime, even to some of the Prime Minister's hon. Friends on the back benches opposite—though apparently not to the hon. Member for Mid-Bedfordshire (Mr. Hastings)- and should we not impose a stricter régimen of sanctions?

The Prime Minister: This country is carrying out all of its obligations on sanctions in a way that no other country is.

Mr. Harold Wilson: Lest words uttered here today should go out from here as representing the views of this House, especially of this side of the House—[Interruption.] I hope that we are all in this together, apart from one or two mavericks on each side of the House, and each side must take responsibility for its mavericks. What is important is the message which goes to Rhodesia and not the twisting of our words as we have seen so often in Rhodesia. Does not the right hon. Gentleman agree that certain powers taken by the legal Government of Rhodesia two days before UDI, condemned at the time, indeed, by Sir Hugh Beadle when he was in this country, were taken as a result of a trick with the Governor? Secondly, does he agree that the courts in Rhodesia in seeking to rule on past cases affecting the freedom of the individual have been robustly reversed by decisions of the Judicial Committee of the Privy Council? We in this House are responsible for Rhodesian citizens because to that extent they are British citizens, and we do not accept decisions taken by an illegal Government or its equally illegal and unconstitutional courts.

The Prime Minister: Those are some of the legal considerations involved in the situation which, the right hon. Gentleman himself agreed, are complicated. What concerns this Government is that the authorities in Rhodesia should take action on the lines put to them specifically, first in private and now in public, in the interests of Mr. Niesewand and his family and of being able at some future time to get a settlement between themselves and those representing the Africans in Rhodesia, and thus with Her Majesty's Government.

HOUSING POLICY (WHITE PAPER)

The Secretary of State for the Environment (Mr. Geoffrey Rippon): I will with permission make a statement about housing policy in England and Wales.
In order to continue the drive for more and better homes and to widen the range of choice the Government are taking new measures designed to implement the great priority we attach to a high and stable level of house building for sale and to a high level of building for rent where it is needed; to bring the existing stock up to a good standard and to attack slums and homelessness; to increase substantially the contribution of the voluntary housing movement; to secure the release of a sufficient supply of land; and to assure an adequate flow of finance and mortgage funds.
Details of these and other measures are set out in a White Paper (Cmnd. 5280), copies of which are available in the Vote Office. My right hon. Friend the Secretary of State for Scotland is also presenting today a White Paper on Housing in Scotland.
The White Paper contains a number of detailed proposals for substantially increasing the supply of land.
To release more land for housing there will be new guidelines for planning applications and appeals. These will contain a general presumption in favour of housing development unless there are serious planning objections.
To secure the more rapid development of land for housing, we intend to introduce a scheme requiring developers to contribute towards the cost of services provided by public authorities in connection with the development of land with planning permission.
To ensure that land released for housing is not hoarded by speculators with impunity, the land hoarding charge announced by my right hon. Friend the Chancellor will be based on the full market value of the land as at today's date, or at the date of planning permission, whichever is the later.
As at present envisaged, the charge will be at the rate of 30 per cent. of that full market value for each year by which completion is delayed after a specified

period, which will normally be four years from the date of planning permission, or from today, whichever is later.
A high and stable level of house building requires also the necessary inflow of funds to the building societies and the Government have begun consultation with them about measures for securing a greater stability in the flow of mortgage funds in the longer term.
At the same time the Government propose measures to expand the voluntary housing movement to enable it to meet additional needs for rented accommodation.
The Housing Corporation is being strengthened and provided with additional funds so that it will play a leading rôle in promoting the expansion of voluntary housing.
In this the Housing Corporation will work closely with the National Building Agency under a single Chairman to be appointed.
He will review their functions and relationship to enable them to promote the development of housing associations in those areas where housing conditions are worst and housing needs are greatest.
Sir Herbert Ashworth, who has served with distinction as Chairman of the Housing Corporation for the last five years, is being appointed Special Adviser on land and housing in New Towns in England and Wales.
Discussions of some of the measures, including the land hoarding charge, will take place with representatives of the local authority associations and other interests affected.
The measures I have described will be financed without increasing public expenditure over the next five years by switching resources from other programmes for which I am responsible.
The Government commend these measures to the House because they will give the necessary priority to housing in the use of resources and represent a balanced development of our housing policies.

Mr. Crosland: It takes an imminent election to galvanise this Government into even talking about action on housing and this statement is a great deal more talk than it is action and, I would think,


is designed mainly to distract the attention of the Press and the public from the crisis into which the Government have got themselves on mortgage interest rates.
I have three questions to put to the Secretary of State. First, is he aware that no informed commentator in the City or in the property world believes that the new land hoarding charge will have any significant effect on the release of land and that it is pure political window dressing?
Secondly, supposing, as I hope, that it secures the release of more land, can the right hon. and learned Gentleman assure the House that the crisis-ridden, lump-ridden, construction industry will be capable of substantially increasing its output? Has he seen the very disturbing forecast put out by NEDO today saying that starts are likely to be lower this year than last year and lower next year than this year?
Thirdly, the right hon. and learned Gentleman talks in his statement about beginning consultations with the building societies about a more even flow of lending. Have the Government only just awakened to the difficulties of this situation? Why on earth were not these consultations started 12 months ago? Is it not about time that the Prime Minister, whom I see here, sacked all his Housing Ministers— because I can assure him that the ineptitude of their performance has been beyond belief?

Mr. Rippon: As the right hon. Gentleman will know, we were committed to introducing proposals of this kind by the White Paper of January and by my right hon. Friend's Budget Statement, so it would be assumed that these proposals would come forward at about this time.
As to action, I think that the right hon. Gentleman will find, when he studies the White Paper, that the land hoarding charge will bite pretty effectively on those speculators who think that it might pay them to hold land which is ripe for development.
The construction industry has a very good record and, provided that the land is available, I think that it will meet the nation's requirements in the future as it has in the past.
As to starts, it is early in the year to say what the out-turn will be, but the

initial figures are in no way unsatisfactory, and I see no reason why the construction industries should not build more houses in the future than they did even last year.
On 6th February we discussed the question of the stable flow of mortgage funds, and I then agreed with the right hon. Gentleman generally about the position. I think that the first time he mentioned it as a possibility was last November. As the right hon. Gentleman presided over two mortgage famines, I cannot understand why he did not do something about it. The measures which are set out in the White Paper carry forward the undertakings which we gave in the January White Paper, in my right hon. Friend's Budget Statement, and in the speeches which I made in the House on 6th February and 14th March.

Mr. Arthur Jones: It is generally recognised that the main defaulters with regard to the hoarding of land are the local authorities and the nationalised industries. To what extent is my right hon. and learned Friend including hoarding by these sources to be dealt with in these proposals?

Mr. Rippon: Those bodies are not affected by the land hoarding charge, but, as my hon. Friend will see, the White Paper deals with the need for the continuous release of land by public authorities and the nationalised industries.

Mr. Pardoe: Is the Secretary of State aware that his land hoarding charge falls woefully short of site value tax which we have recommended for more than 20 years, and that land hoarding starts, not with planning permission, but when the land is zoned for development? Four years from the grant of planning permission is far too long to delay the imposition of this tax. The need is for a full site value tax, at 30 per cent. at least, from the moment the land is zoned for residential development.

Mr. Rippon: The question of rating site values has been the subject of consideration by royal commissions and inter-departmental committees over the last half century, and the reasons for rejecting it are as valid as ever. The hon. Gentleman will see, when he studies the White Paper, that the charge will bite effectively and quickly.

Mr. John Hall: Can my right hon. and learned Friend give any estimate of the amount of land for which planning permission has now been granted which is likely to be affected by the new tax?

Mr. Rippon: It is difficult to give a precise figure for the country as a whole. We have given figures in the House for the position in the South-East of England. We have asked the local authorities to provide full figures about the position. We announced that in January. About one-third of them have replied. This will become clear.

Mr. Frank Allaun: Has not the Secretary of State left a gaping loophole, namely, that a landowner can delay applying for planning permission until he is ready to sell the land and, therefore, avoid having to pay any tax and delay the whole business? Secondly, is it not a fact that this proposal fails to deal with the root evil, which is that land can multiply in price up to a hundredfold once building permission is given, so that an average house in London is now costing £5,000 before a single brick is laid and Lord Wimborne's £250,000 estate becomes worth £26 million? Therefore, though the Minister's plan may speed up land sales, it will not stop price increases by one penny.

Mr. Rippon: Where there is land which is ripe for development for housing and the owner will not seek planning permission, there are compulsory purchase powers available and I would be quite happy to see them used. Some guidance is given in the White Paper on that aspect of the problem. In the longer term we must seek to balance supply and demand for housing. One of the ways in which we can bring down the price of land is by making it much more generally available.

Mr. Deedes: As the need for a land hoarding charge is likely to be contentious, can my right hon. and learned Friend confirm or otherwise that the stock of land now held in London and the South-East alone on which planning permission has been granted has been reliably estimated as being worth roughly one year's housing supply?

Mr. Rippon: If it is desired to sustain a housing programme of about 400,000 houses a year, it is necessary to bring 

forward each year about 40,000 acres of land. This is a very considerable problem and it is necessary to secure the release of land on a pretty considerable scale.

Mr. Douglas-Mann: Does not the right hon. and learned Gentleman agree that the most essential ingredient of the comprehensive approach to the problems of stress areas, to which he refers in paragraph 51 of the White Paper, is to encourage local authorities to acquire as rapidly as possible as much of the privately rented housing in their areas before it disappears from renting altogether and to acquire houses that are vacant in their area?
Secondly, does not the right hon. and learned Gentleman agree also that the most essential ingredient in the attack on homelessness will be to enable local authorities—this lies in his power—to use empty houses they have, by adjusting the grant structure to enable grants to be paid on houses which have less than 15 years of useful life left?

Mr. Rippon: I intend to bring forward proposals in due course. The White Paper emphasises that local authorities and other bodies should make available empty houses to deal with problems of homelessness, which is one of our most acute social evils.
If it is the case, as it is in some stress areas, that private landlords are not using the improvement grant scheme, I recognise that there is a case for the local authority to step in and deal with the situation. The White Paper says that.
I stress the importance also—because it is not right to leave it all to local authorities—of local authorities working in co-operation with the voluntary housing movement.

Mr. Raison: What is my right hon. and learned Friend's policy now towards building in green belt and proposed green belt extension areas?

Mr. Rippon: I have dealt with this question in recent speeches at some length. I expressed the view, which I think is right, that there are at present in certain green belt areas—the Metropolitan green belt, in particular—certain areas which are marginal and which make little or no contribution to amenity and on which it would be right to build


houses. However, I do not want that to be construed as an attack on the green belt policy as such. We believe that the green belt should in many cases be extended, as we have done with the Metropolitan green belt by 70,000 acres recently, and that amenities in the green belt should be improved.
On the other hand, the White Paper suggests that, in consultation with the authorities concerned, we should identify about 2,000 acres in the Metropolitan green belt which could, in certain circumstances, in view of the changing conditions over 20 years or so, be made available for housing.

Several Hon. Members rose—

Mr. Speaker: I am not going to stop hon. Members asking questions on this matter. I merely point out that this is an Opposition Supply Day. If hon. Members wish to continue asking questions, so far as I am concerned they may do so, but I point out that it is taking time out of the Supply Day debates.

Mr. George Thomas: Would the right hon. and learned Gentleman say whether the Secretary of State for Wales is in charge of housing in Wales? Since the Secretary of State's remit does not cover housing policy in Wales, and since this is the very first time since the Welsh Office was set up that the Secretary of State for Wales has not spoken on behalf of housing policy in Wales, are we right to take this as a measure of the contempt which the present Government have for the Welsh Office?

Mr. Rippon: That is all rubbish. As the right hon. Gentleman will see, this is a White Paper which was presented by the Secretary of State for the Environment and the Secretary of State for Wales jointly. Therefore, it is a joint policy which has been presented. None of the difficulties that the right hon. Gentleman imagines will arise.

Mr. Idris Owen: Is my right hon. and learned Friend aware that to enable his policy which has been announced this afternoon to have a considerable degree of success, there will be insufficient labour available to start the sites which become available? Would he have a word with his colleague at the

Department of Employment with a view to training more men rapidly so that his policy will be successful?

Mr. Rippon: My hon. Friend the Minister for Housing and Construction has had a series of meetings with the Department of Employment and with the builders. I agree that there is a need, and a continuing need, to improve the efficiency of the building industry. If there were unlimited efficiency and unlimited labour we could build an unlimited number of houses. I should certainly like to see the target raised continually over the years. I believe, however, that this policy will ensure a high and stable level of house building. I would point out that such is the importance that the Government attach to housing that we say that the efforts of the construction industry in the redeployment of resources must be concentrated on housing needs.

Mr. Ewing: Could the Secretary of State say, particularly in relation to Scotland, how the White Paper will affect new town development corporations? He must be aware that new town development corporations must of necessity buy up vast amounts of land in order to plan their future housing needs, and in some of these cases it will not be possible to develop that land within the stipulated period. Has the right hon. and learned Gentleman been panicked into introducing a broad general principle because of the events of the past week—a broad principle which could react very badly on local authorities? Will he give an assurance that he will resist private builders pressurising local authorities to release land for building into which the local authorities have already put the services—drainage, roads and so forth?

Mr. Rippon: The White Paper clearly follows up the action and statements which we have undertaken over the past few months. It is brought forward as an accumulation of the undertakings which we have given at various stages to the House since January.
With regard to Scotland, my right hon. Friend the Secretary of State for Scotland is producing today his own White Paper. That is now available. The situation in Scotland is rather different, partly because of the activities of the Scottish


Special Housing Association. Sir Herbert Ashworth will be the adviser on new towns in England and Wales, but the Secretary of State for Scotland will still deal with the position in Scotland.

Mr. Hugh Fraser: While hoping that my right hon. and learned Friend's measures will bring forward more land, may I ask whether he would switch his mind to the real problem relating to the getting of planning permission for house construction? At the moment detailed planning permission takes as long as a year, and this will get worse because of the changes brought about by local government reorganisation this year. This is a practical problem and I hope my right hon. and learned Friend and his colleagues will give their attention to this problem. If that were done, there would be more land coming on to the market.

Mr. Rippon: I am grateful to my right hon. Friend. He is undoubtedly right. That is the purpose of the new planning guidelines which we propose to issue.

Mr. David Stoddart: Is the Secretary of State aware that the land hoarding tax may well exacerbate the situation? Will he not now accept that the only way of dealing with the land problem is through public ownership? More immediately, is he aware that there is an acute shortage of bricks and that the average waiting period is eight months? What does he intend to do to improve the supply of bricks?

Mr. Rippon: I do not think it is helpful to say that these things should be done by wholesale municipalisation or nationalisation. I am not sure what effect that might have on the public borrowing requirement. That is far too simple an idea.
Brick supplies at the moment are pretty good, but I hope brickworks will be put under pressure.

Mr. Redmond: Would my right hon. and learned Friend agree that the shortage of building operatives is caused by the

lack of training in the industry, that lack of training has been caused by the lump, that the lump was caused by SET, and now that SET has gone may we expect a change of emphasis in the building industry which will help to get the houses built?

Mr. Rippon: There are problems of the kind to which my hon. Friend referred. My hon. Friend the Minister for Housing and Construction has been having discussions about these matters which I appreciate are of some concern.

Mr. Harold Wilson: Would the Secretary of State explain why the proposals in the White Paper were broadcast on the BBC radio news last Thursday night and, indeed, led the news? I appreciate that he would not be sorry, in view of the humiliation which he had had that afternoon, but why is it that the House was denied this information when the BBC already had it? Is the Secretary of State aware that we were able to read about the main principles of the White Paper in the Press on Sunday and Monday and that to this extent he has wasted his time explaining it to us today? Will the right hon. and learned Gentleman hold an inquiry, if he feels that it is appropriate, to see how this got out instead of being announced to the House when this is in fulfilment of a Budget proposition? Is he aware that people reading and understanding what has been put out could, of course, react as they might to the disclosure of any other Budget secret? Would he inquire into what has been happening?

Mr. Rippon: That is the first representation that I have had on this matter. I would have thought that if the right hon. Gentleman had heard something on the news which I did not hear, he would have mentioned it to me earlier.
The principle of the land hoarding charge was explained by my right hon. Friend the Chancellor of the Exchequer in the Budget. Therefore, there has been an element of speculation. I was rather pleased that so little had appeared—certainly none of the details.

Orders of the Day — SUPPLY

[16TH ALLOTTED DAY],—considered.

Orders of the Day — BUILDING SOCIETIES (INTEREST RATES)

4.8 p.m.

Mr. Anthony Crosland: I beg to move,
That this House condemns Her Majesty's Government for the bungled, inflationary and inequitable manner in which it has dealt with a mortgage rate crisis which is entirely due to the catastrophic failure of the Government's own housing and monetary policies.
I have never known, in the fairly long period that I have been in politics, a Government announcement, especially one giving away money, that has been greeted with such universal derision and contempt as the statement on mortgage rates last week.
The Secretary of State for the Environment when he made the statement was virtually friendless in the House, and the Government have been friendless in the Press, and in a Press which is normally sympathetic to them. The reasons for this were obvious. First, the rise in mortgage rates to 9½ per cent. shattered such few of the 1970 election pledges as have not already been broken. Second, the crisis would not have arisen but for the Government's insufferable complacency in the face of repeated warnings of what would be likely to happen. Third, the Government's reaction to the crisis—the grant of £15 million—was solely and cynically dictated by the prospect of the county elections this coming Thursday.
I want to deal briefly with each of these three points in turn. First, I wish to deal with the Tory promises made in that most disgraceful of election campaigns. Let me remind the House of the words of the Tory Election Manifesto "A Better Tomorrow":
The increase in the cost of new homes, and the highest mortgage interest-rates in our history, have prevented thousands of young people from becoming owners of their own homes …. Today, mortgage repayments on the average-priced new house are £3 a week more than when Labour came to power.
The Secretary of State for Trade and Industry, who was then in charge of hous-

ing matters, added during the course of that election campaign:
Labour's wanton betrayal of promises has cost the homes of thousands. The people Labour forgot will not forget Labour's failure.
What are the facts? When Labour left office, the cost of an 80 per cent 25-year mortgage on the average-price new home was £7·37 a week. Today, it is £14·23 a week—nearly double. Under the Tories, the cost of a mortgage has risen not by £3 a week but by £6 a week, and not in six years but in less than three.
The Secretary of State for Trade and Industry, who made many speeches at that time, had another favourite theme, that the cost of a mortgage was going up more than earnings. He said—this time in the House in one of our many housing debates—
Whereas during the period of the Labour Government the mortgage cost of an average-price new house went up 77 per cent., earnings went up by 54 per cent., with the consequence that fewer and fewer people on average earnings could afford to buy an average-price new house. Under this Conservative Government, on the other hand, because of the decrease in the mortgage interest rate
—those were the days—
and the increase which has taken place in earnings, the reverse has been true."— [OFFICIAL REPORT, 8th November 1971; Vol. 825, c. 678.]
How do things look now after 2¾ years? The rise in earnings under this Government has so far been 34 per cent., but the mortgage cost of an average-price new house has risen by 93 per cent. That is the Government's record.
My second point is that the present situation need never have arisen. It has arisen because of the improvident behaviour of the building societies when funds were plentiful, and because of the irresponsibility and inconsistency of the Government's own monetary policies.
The behaviour of the building societies in the last two years has been incredible. In 1971 and 1972, they enjoyed a huge inflow of funds because their rates at that time were highly competitive. They did not query for a moment the wisdom of lending out all those funds in mortgages. They did not ask what would be the effect on house prices if they did. They did not wonder whether they should put some of those funds into a reserve fund against a rainy day. They blindly, thoughtlessly and automatically pumped them all out.
In 1971, the amount of mortgage lending rose from £2,000 million to £2,700 million, an increase of one-third. In 1972, the amount increased by one-third again, from £2,700 million to £3,600 million. But this did not—I shall not weary the House by repeating myself; I have said it again and again—enable people to buy one-third more houses in each of those years, because only 2½ per cent. more houses were built in each of those two years. What it did was simply to drive up the price of houses to their present crazy level, and it left the building societies empty-handed and defenceless against any change for the worse in monetary conditions.
This year, the change for the worse has occurred, and occurred with a vengeance. The societies now find themselves not flush with funds but acutely short of funds due entirely to the Government's actions. The Government's borrowing requirement of £4,400 million has pushed up interests rates of all kinds right through the ceiling. The Chancellor, by beefing up the attractions of national savings in the Budget—these are the building societies' most direct competitor —has worsened the position still further. It is extraordinary that the Chancellor's right hand seems to have no idea what his left hand is doing. In the Budget, he improves the attractiveness of national sayings. When this has the predictable and, presumably, desired effect that other savings become less attractive, he reverses himself and pumps money into other forms of savings. An extraordinary attitude. In fact, there is no co-ordination between the Government's monetary policies and their housing policy, any more than there is between their housing policy and their prices and incomes policy.
In addition, the new system of monetary control set out in "Competition and Credit Control" has been a further background influence in pushing interest rates all round.
The building societies were caught with their pants down. Less money was coming in. More money with withdrawn. The Government showed no sign of recalling the promise, made in small print in "Competition and Creditor Control", that they would safeguard the building societies from any adverse effects of the new monetary system. First, then, the building societies put up their borrow-

ing rate to 6·3 per cent. That did not do the job, and they made clear that they would have to put it up further to 6·75 per cent., which would involve a 10 per cent. mortgage lending rate.
All this was due to their refusal in the two previous lush years to give a moment's thought to the future, and due to the Government's monetary decisions taken in total disregard of their likely effect on the home buyer.
At this point, politics take over totally from finance, and logic and reason become entirely subordinated to Government anxieties about the GLC and county elections. First, the Government twist the building societies' arm and persuade them to postpone a decision on higher rates until 13th April, one day after the elections. The building societies reluctantly agree, though with a good deal of angry muttering. Ministers heave a sigh of relief, even though they know that on 13th April rates will have to go up to 10 per cent. They are quite happy that that should be so, provided that the elections are over by then, because their concern for the owner-occupier is always rather precisely correlated with the dates of general or local elections.
Then came the bombshell. The building societies announced that they were not prepared to wait till 13th April. They were to have a meeting last week, and at that meeting the rate would certainly go up to 10 per cent. So last week's distasteful farce began to unfold. It was action stations and panic in Whitehall. This time, no doubt, it was Sir Desmond Plummer on the telephone to the Prime Minister rather than the other way round, and, in some slight revenge for the famous telephone call to Japan, Sir Desmond Plummer was blowing his own top in the reverse direction.
Sir Stanley Morton and his colleagues were constantly peregrinating in and out of Minister's offices. There were Cabinet meetings, and Cabinet splits—"Will they, won't they?"—with daily and contradictory briefings to the Press. A classic example of how not to govern a country. Finally, there was the ridiculous mouse of the £15 million, with the Secretary of State for the Environment as fall-guy last week. The whole thing was a thoroughly discreditable story.
There is an interesting sidelight on last week's low comedy events which vividly illustrates the Government's sense of values. Sir Stanley Morton and his colleagues not only had instant access to senior Ministers when they wanted it; they were peremptorily summoned to Whitehall at all hours of the day and night. But during last week there was another distinguished public figure trying anxiously to fix an appointment with one of the senior housing Ministers. I refer to Sir Robert Thomas, chairman of the Association of Municipal Corporations. He wanted to bring a deputation to discuss the next increase in council house rents due on 28th April. He offered five separate dates for this important deputation, but, unlike Sir Stanley Morton, he was told that Ministers were far too busy. When told that the Secretary of State for the Environment was not able to see him until after the local elections, he said "Very well. I shall be glad to see the Minister for Housing and Construction ", but he was told that he, too, was too busily committed to see the deputation until after the local elections.

Mr. Frank Allaun: That deputation was supported, was it not, not only by the AMC but by the TUC? Here we have a Government freezing wages and at the same time refusing to meet representatives of the AMC and the TUC about rent increases—never mind about the extra being given to people who, perhaps, have £20,000 mortgages.

Mr. Crosland: My hon. Friend is absolutely right, and he underlines the point. Clearly, one carries no weight with this Government if one merely represents council tenants. After all, they do not merit a bribe. Sir Desmond Plummer is not blowing his top about them, because they will vote Labour anyway. And, good heavens, so they will!
I come now to the criticisms of the Government's way out of this crisis of their own making.

Mr. Gerald Kaufman: Mr. Gerald Kaufman (Manchester, Ardwick)  rose—

Mr. Crosland: I would prefer not to give way. We started the debate late and I expect that a large number of people want to speak and if my hon. Friend will forgive me I shall carry on.
Many criticisms have been couched in terms of the inconsistency and illogicality of the Government's monetary policy. These criticisms are in my view sustained and I have no doubt we shall hear them forcefully put in the debate. I want to criticise, however, in terms of housing policy and of the inequity of the proposed subsidy taken in isolation. It is a subsidy, however much Sir Stanley Morton may protest to the contrary. It is a direct subsidy to the mortgage lending rate.
What should our attitude be? We would all agree that generally the owner-occupier is treated generously by our society. He receives mortgage interest tax relief, he pays no Schedule A now on imputed rent income, he pays no capital gains tax, he receives the advantage of improvement grant and he enjoys the best of all possible hedges against inflation. On the other hand, although a house is the best of all long-term investments, the burden of mortgage interest and mortgage repayments in the early years has risen under this Government to an intolerable level. It is now a very heavy burden on the new and recent borrower. There is, therefore, a strong case for avoiding an additional burden of mortgage costs for the young, the new and the recent borrower.
Is the Government's chosen method the best way to do this? My answer is firmly "No". The best way would have been never to have got into this situation in the first place. The Government should have adopted my proposal last year—and no doubt I should have put it forward earlier than I did, although I put it forward a great deal earlier than the Secretary of State—for a building society stabilisation fund. That would have enabled lending now to go on at an adequate level without the need for a 10 per cent. mortgage rate.
I still think that the right thing would be to create such a fund now. But if help is to be given now—special help apart from the stabilisation fund—to meet this crisis of the Government's own making, it must satisfy one of two essential conditions. One condition is that there should be no increase in the total help going to the owner-occupier. In other words, the £15 million should be found by legislating—not by twisting the building societies' arms but by legislating —to withdraw mortgage interest tax


relief on second homes and on mortgages above a certain level.
Everyone in the House wants to help the young home-buyer. But it is a scandal, the extent to which we help the man who buys property as a speculation, the man who buys a weekend cottage or holiday house which is empty for nine-tenths of the year, and from which he probably derives a healthy income for much of the year, and the man who wants to buy a £30,000 or £40,000 house in London. Therefore the help in total to the owner-occupier should not increase and the £15 million should be paid for by lopping off concessions at the top end.
The other essential condition, if the first is not met, is that, if help to the owner-occupier is to be increased, there should be an equivalent increase in the help for council and private tenants whose incomes on average are lower and whose need on average is greater. The Secretary of State tried to claim last week when he made his statement that this was what was happening, that the extra £15 million was balanced by the recent increase in the needs allowance, but that analogy is totally false. Help now being given to the owner-occupier is far greater than that being given to tenants by way of the needs allowance. It is not just £15 million in grant. There is also additional tax relief on the 1 per cent. rise in mortgage rates which will cost the Exchequer £36 million over the next year, making the total of help to the owner-occupier £51 million. The estimated cost of the higher needs allowance is only £25 million to £30 million and so the owner-occupier is getting twice as much help as the tenant.
Of course there is also this crucial difference that this additional help goes on top of a rising total whereas the help to tenants goes on top of a declining total. Whereas the cost of tax relief has risen by £40 million to a total of £340 million in 1971–72, and is certain to rise still further, the Public Expenditure White Paper shows that subsidies for tenants would fall by about £70 million from 1972–73 to 1973–74. The fall will be only £40 million to £45 million with the higher needs allowance, but a fall is a fall is a fall. In summary the owner-occupier will receive 13 per cent. more from the

Government in 1973–74 while the tenant will receive 8 per cent. less. That is the basic inequity of the system.
This ignores also the fact referred to by one of my hon. Friends last week that the tenants' help is means-tested whereas the owner-occupiers' help is not. So much for the pledge in the Tory election manifesto to concentrate Government subsidies where they are most needed.
The Government's other two arguments for this particular method of help are equally unconvincing. One is that it is necessary as part of the counter-inflation policy and the other is that it is necessary to keep up sufficient demand for new housing—and goodness knows that is a problem enough. I referred at Question Time to today's NEDO forecasts about what is likely to happen to housing starts in the next two years, and the figures are alarming. Both these arguments, however, assume that the help is permanent and will continue, if necessary, after three months. But the Chancellor made it clear that the help will stop after three months, even if, as is likely, building societies raise their rates to 10 per cent.
What should the Government have done? Here I wish to say a word about the rôle of the building societies. I have great respect for the building society leaders. They are honourable and public-spirited men who carry out their duty as they see it. One of the disgraceful things of the last few days has been the way in which they have been made both a scapegoat and a political football by the Government. I have a great deal of sympathy with some of the pained complaints to which some of them have given vent. Nevertheless, the events of the last five years have shown that we must fundamentally reconsider their rôle and their mode of operation. We shall have to discuss that in much greater detail on another occasion.
I make only these points: building societies are the self-appointed financiers of owner-occupation. They provide about 80 per cent. of total mortgage finance. But in the last five years they have conspicuously failed in what should be their central aim—to ensure a steady increase in finance and therefore to keep house prices reasonably stable and to offer a stable demand for the building industry. Instead of that we have had


gluts and famines, wild inflation of house prices and a devastating cyclical effect on the building industry.
I do not believe that the answer consists of playing about with reserve ratios. In the long run that is mere tinkering. I am certain that it does not consist in altering the composite rate of tax. That would constitute a subsidy to the better-off depositors and would be altogether the wrong approach. The immediate need is for a stabilisation fund—after all, Joseph persuaded Pharoah to set up a corn supply stabilisation fund which on the whole seemed to work quite well. If we had had one in the last two years, with all the money that was pouring into the societies, we would have avoided the present situation.
It is a tragedy that the Government refused even to consider, let alone to adopt, this proposal many months ago. It must be done even now unless we are to face a worse possible crisis in the year ahead. The Government are right when they say that now is not the ideal moment to do it. Of course it is not—a few months ago would have been the ideal moment. But this is entirely the fault of the Government and it is extraordinary that they have only now just begun consultations with the building societies. All they ever do in every direction is to give the stable door a gentle push long after the horse has bolted.
In the long run we shall have to consider more fundamental proposals, such as the possibility that insurance companies and pension funds should devote a proportion of their funds to mortgage lending. We shall have to consider the very disturbing rise in the ratio of expenses that the building society movement has displayed in the past few years. We shall certainly have to consider the injection of an element of competitive public enterprise, and many other things. But those are long-term matters.
In the short run we condemn the Government unequivocally, not for their desire to help the young home-buyer—a laudable desire that we strongly share— but for acting too late, because they ignored our proposals for a stabilisation fund; for acting inequitably, because they have given additional help to the owner-occupier but not to the private tenant and

the council tenant; and for acting with bare-faced cynicism, as what they have done has been related solely to the forthcoming county elections.
I do not need to repeat that the Government's housing policy is in ruins. That is obvious to everyone. But the most unpleasant aspect of last week's events was the open and shameless attempt to bribe a section of the electorate. Fortunately, it will not have the slightest effect on Thursday's results.

4.31 p.m.

The Secretary of State for the Environment (Mr. Geoffrey Rippon): The right hon. Member for Grimsby (Mr. Crosland) has made his own vigorous election speech, but he was rather more confused than usual. That is not surprising, because he is speaking to a hysterical motion that totally mixes up the short-and long-term problems. That was evident from his reaction that I read in the Financial Times last week to the proposal for the £15 million bridging grant. He called it a bridging loan. I think that it was an instant reaction, because the money is in fact a bridging grant, as needs to be made quite clear.
The right hon. Gentleman talked then about the £15 million being a token approach to a stabilisation fund. It is not a short-term aproach to a stabilisation fund. It is designed to meet an immediate problem in the context of phase 2 of the counter-inflation policy.

Mr. Crosland: The right hon. and learned Gentleman is right to say that I made that statement and used the phrase "bridging loan". I had then assumed wrongly—I had not read the full text— that it was a loan, and was therefore an approach to a stabilisation fund. I agree that, in that the £15 million is a grant, that comment is not applicable.

Mr. Rippon: I am grateful to the right hon. Gentleman. It is important to get the distinction clear. It was in no way our purpose to do this as a first step towards a stabilisation fund.
It is perhaps significant that the motion does not attack the bridging grant as such. Indeed, the Leader of the Opposition has himself called for building society mortgage loan rates to be limited by subsidy if necessary. He said on 31st October
 


1972, speaking in the context of an incomes and prices agreement:
there must be a limit on building society mortgage rates, and this, if necessary, may mean subsidies. The Government should not reject this on the ground of the sanctity of the freedom of the City".—[OFFICIAL REPORT, 31st October 1972; Vol. 845, c. 30.]
Therefore, the Opposition have no objection in principle.
It is not inequitable that we should, in the context of counter-inflation measures, give the same short-term help to the house-owner as we have already given to council and private tenants through not only the £160 million for rebate schemes but the up to £30 million for the increased needs allowance. That will be continuing help.
It can be said with some justification that the £15 million is aid that goes to all mortgagors and is not subject to the means test. But we faced the same problem with our special arrangements for the payment of £10 to old-age pensioners before Christmas. In taking effective action it is not always possible to distinguish between those who are rich and those who are not so rich. As I pointed out when I dealt with the matter in the House on Thursday, a high proportion of the people with whom we are dealing are paying off mortgages and earning below-average industrial wages.
I should like to deal with the short-term action and the reason for it. It had nothing whatever to do with the local elections. The timing was determined by the Building Societies Association, which called its special meeting. As the right hon. Gentleman said, we have been having discussions with the Association over a period. We asked it to have regard to two facts. The first was the counter-inflation policy and the difficulty being encountered in a period of wage restraint. Secondly, we asked it to have regard to the fact that we should be producing a housing White Paper, which would put that short-term problem in the broader context of discussions on stabilisation.

Mr. Frank Allaun: Mr. Frank Allaun rose—

Mr. Rippon: This is a short debate, so I shall not give way.
In our debate on 14th March I spoke at some length about the rising demand for home ownership and the Government's

determination to try to meet it by a high and sustained housebuilding programme. We have done better than the achievements of a Labour Government. The measure of our success is that in 1972, as compared with 1970, mortgages for first-time purchasers rose from 301,000 to 371,000; for borrowers under 25 from 117,000 to 144,000; and for borrowers with up-to-average industrial earnings from 158,000 to 192,000. Over the past two years the total number of new house owners has risen by 500,000.
That has undoubtedly put considerable pressure on the building societies. I said on 14th March:
The basic position of the building society movement remains sound. Its assets exceed £15,000 million. Repayment of principal last year reached the record figure of £1,400 million, a sum which by itself can support a large number of new advances. Nevertheless we have to accept that the building societies have to retain and attract funds from investment. Inevitably that raises the question to which the right hon. Gentleman referred—whether mortgage lending rates should be increased… Difficult and conflicting considerations are involved."—[OFFICIAL REPORT, 14th March 1973; Vol. 852, c. 1323.]
What are those considerations? First, we must do all we can to avoid a shortage of mortgage funds. The low level of private housing activity in 1965–66 and in 1969 and 1970 was surely due in large part to the shortage of mortgage funds in those years, when the right hon. Gentleman was saying nothing about a stabilisation fund.
Of course, we could take different views on such matters as the appropriate level of building society liquidity and reserve ratios in relation to the statutory minimum requirements. But I agree with the right hon. Gentleman that they do not go to the heart of the problem we are discussing.
There is no escaping one basic fact. In the longer run building societies cannot be totally insulated from the market for savings. They must offer investors a rate of interest sufficiently competitive to retain and attract enough funds to support existing mortgages and to finance new mortgages. That is why many building societies, rightly or wrongly, have judged that in the current conditions they must raise their investment rate to 6·75 per cent. net to bring in an adequate flow of funds.
The second consideration is that we must accept that the building societies are strong and do not need special financial help in the present situation. That is why the right hon. Gentleman is wrong to insist on calling the payment a subsidy to the building societies, when it is help to the individual owner-occupier at a time of temporary wage restraint.
I cannot accept the suggestion that some right hon. and hon. Labour Members have made on television and radio that the building societies could offer a low and uncompetitive investment rate to avoid raising the mortgage lending rate, and that the Government should plug the gap with repayable Exchequer loans for use for mortgage lending. If the building societies kept down the investment rate to 5·6 per cent., which corresponds to a mortgage rate of 8·5 per cent., at the prevailing rates of interest Exchequer loans would amount to many hundreds of millions of pounds over the next few months, and not merely the £15 million bridging grant. That would have represented a totally unacceptable increase in the public borrowing requirement. What we are doing now does not involve an increase in that requirement.
Thirdly—and this is where the difficulty and the conflict arises between the short-term and the long-term considerations—we believe that during phase 2 of the Government's counter-inflation policy some temporary help to mortgagors in an abnormal situation is justifiable. The longer-term need is for measures to ensure a more stable flow of funds.
Quite apart from the justification for temporary action to help owner-occupiers at a time of wage restraint—such action is justified for the same reasons which justified helping other sections of the community—the evidence which we have suggests that recent withdrawals from building societies have been used not to invest in other markets. There is no evidence of a shift from one form of investment to another—for example, from the building societies to National Savings. It seems that withdrawals have been made to finance a surge of consumer spending in advance of the introduction of value added tax. If that is so, the funds should begin to flow back to the societies in the weeks ahead.
In the special circumstances, we thought it wrong that the mortgage lend-
 

ing rate should be put up to 10 per cent. which the arithmetic of a 6·75 per cent. investment rate would justify. The action which we have taken is temporary. My right hon. Friend the Chancellor of the Exchequer has made that clear. There will be no question of permanently holding down the interest rate below its true level. It should be possible in a few months' time to judge more accurately the appropriate rate for mortgages.
The motion talks about the Government's action being inflationary. No one wants higher interest rates for their own sake—certainly not the Government. It must be remembered that high interest rates are not a cause of inflation so much as a consequence of it. As my right hon. Friend the Chancellor of the Exchequer in his Budget statement said:
Because expectations about the future rate of inflation are a major factor in determining the level of interest rates, the success of the counter-inflation policies is crucial to improvement in this sphere as in others."—[OFFICIAL REPORT, 6th March 1973; Vol. 852, c. 252.]

Mr. Frank Allaun: Mr. Frank Allaun rose—

Mr. Rippon: A 10 per cent. mortgage lending rate would have meant an increase of about 13 per cent. in the gross repayment on a new annuity mortgage. The effect of the bridging grant should be in the short term to moderate increases in new gross mortgage costs from 13 per cent. to 8 per cent. That is right and equitable in the context of the counter-inflation measure.

Mr. Allaun: The right hon. and learned Gentleman has referred three times to counter-inflationary measures. Does he admit that on 28th April millions of families, both council tenants and private tenants, will have large rent increases and that only a minority of them will have a rebate? Does not he think that it is doubly unfair to do that, which is unnecessary, at a time when he is talking about curbing prices and giving extra help to some wealthy people in the owner-occupier sector?

Mr. Rippon: I know that the hon. Gentleman does not want to listen to my answer. We raised the needs allowance by £3·50 to deal with that situation. As a result of that action the average family, with two children, with an income of £35 a week—even though the rent of a council house may rise—may well, because of
 


the effect of the needs allowance, pay less in future than it pays now. We have helped the position not only of council tenants but of private tenants.

Mr. Raphael Tuck: That is a drop in the bucket.

Mr. Rippon: A reduction in rent cannot be called a drop in the bucket. The hon. Gentleman has not bothered to look at the effect of an increase of £3·50 in the needs allowance. It would help his constituents more if he explained to them how they will be able to obtain their rent reductions which the Government are providing, instead of misleading them into thinking that they have to pay an increase.
It is hard to see how inequitable, as the right hon. Gentleman suggests, this modest aid to the mortgagor is—this ridiculous mouse, as the right hon. Gentleman called it—when we have done so much for other sections of the community. The right hon. Gentleman did not give sufficient weight to the fact that the effect of the bridging grant will be to maintain a reasonable flow of mortgage funds and to keep up a high level of new building at a crucial time.
Meanwhile, the building societies have agreed that they will try to help existing mortgagors accommodate an increase in the lending rate to 9·5 per cent. by offering an extension in the mortgage loan period where possible. I agree with much of what the right hon. Gentleman said about the situation facing first-time purchasers. That applies particularly in an area of high prices. I think that they will be helped by the fact that the Building Societies Association will recommend its members to limit special advances over £13,000 as far as possible. We shall be discussing with the building society representatives whether means can be found of making it easier for young couples in particular to get their foot on the first rung of the home ownership ladder.
In the longer term, I believe that all house purchasers will benefit if we can find satisfactory means of stabilising the flow of mortgage funds.
I shall now deal with the real substance of the right hon. Gentleman's case. I indicated my general agreement with him on stabilisation on 6th March. However, stabilisation cannot be introduced easily or overnight. It is a difficult problem. I
 

have no doubt that the right hon. Gentleman found that it was a difficult problem and, of course, he decided not to stabilise when he was responsible for these matters.
My right hon. Friend the Member for Gloucestershire, South (Sir F. Corfield) and I dealt with this matter between elections in a pamphlet called "Target for Homes". We had to find some way to deal with the situation where the building societies are borrowing on short term and lending on long term. It is not an easy matter. About 85 per cent. of all residential mortgage funds are provided by building societies. They are non-profit making organisations, but they have to live in the commercial world and they have to come to terms with it. Changes in credit conditions—and perhaps the administrative requirements and policies of building societies themselves—have contributed to the alternation of mortgage glut and mortgage famine over the last 10 years. That has contributed to the steep fluctuations in the output of new houses; and to increases in house prices when demand outstrips supply at the end of each period of shortage.
I doubt whether any system of stabilisation could in itself make mortgages significantly cheaper in the longer run than otherwise would be the case. Building societies must depend on investment from the public raised at market rates of interest. But what we can reasonably hope for from an effective stabilisation system are the stabler prices that should flow from a stable level of housing building, and the social benefits of avoiding the disappointment and frustration among couples setting up homes who find that they cannot get loans at a time of mortgage famine. That is the mischief that a long-term policy could help to meet. That is why we began urgent consultations with the building societies.
It is important to distinguish between short-term action and the longer term questions which the right hon. Gentleman has raised, which require a good deal of research and study.

Mr. Dennis Skinner: With regard to long-term proposals that the Minister might have, has he taken account of the fact that the Prime Minister, just prior to the General Election in June 1970. promised, when he was asked about the 8½ per cent. mortgages


that then prevailed and what his answer would be, to reduce mortgages, and added that the Conservative Party was studying the Merritt-Sykes system and the Australian proposals? Have the Government gone into the matter since 1970?

Mr. Rippon: The matter has been considered. There is a great deal of merit in the Australian system. It is worthy of study. The hon. Gentleman's intervention demonstrates that this is not a matter which could have been dealt with, as the right hon. Gentleman suggested, overnight as an alternative to temporary measures. Indeed, he had the same difficulties himself. We would hesitate before we changed completely the system on which we base our building societies at present.
The Opposition have rightly concentrated, because of the topicality of the matter, on the financial aspect. But the motion condemns the whole of the Government's housing policy. The right hon. Gentleman did that also in a rather conventional electioneering peroration. It is impossible to separate the question of housing finance from the supply of land and other considerations of housing policy. That is what we are dealing with in the White Paper published today. With the release of land, we have had considerable success already. The new planning guidelines I propose will help further. They will contain a general presumption in favour of housing development. There will no longer be an automatic presumption against using white land for housing. In growth areas, there will have to be exceptionally compelling planning objections before the strong general presumption in favour of housing can be over-ridden.
The land hoarding charge will not only penalise speculative hoarding of land without planning permission but will provide a powerful inducement to owners of land which now has planning permission for housing to develop that land. I am also proposing legislation to facilitate partnership schemes between local authorities and private enterprise and to require developers to contribute towards the cost of services. All these measures will help to bring more land forward for development and to remove what has

been a major obstacle to getting more houses built for sale.
Although most people want to own their own homes, there are and will always be many people who prefer to rent or cannot afford to buy. It is part of our housing policy that we should seek to meet these varying needs by slum clearance, by improvement and by new building to rent. But we should not aim, as has been suggested, at a municipal monopoly of rented accommodation. Local authorities should not be the only agency which builds for rent.
That is why we are taking measures to strengthen the Housing Corporation and the National Building Agency in the way I foreshadowed in our debates earlier this year. They can more easily meet urgent requirements—for example, of those who move into an area. The new remit of the Housing Corporation will be to promote the development and effectiveness of the whole voluntary housing movement and, above all, to give particular help to those housing associations which are active in areas of bad housing, whether by the purchase, conversion and improvement of existing older dwellings or by the provision of new dwellings. That provision will go a very long way to meeting the needs expressed today.
I entirely refute the way in which the motion seeks to reject the housing policy of the Government as a whole. I believe that the action we have taken and the new measures announced in the White Paper, which represent a major shift of resources to housing, demonstrate that our policy is coherent, vigorous and calculated to achieve better conditions over the whole spectrum of housing and to give the wider housing choice that we all want to see.

4.53 p.m.

Mr. Michael Stewart: When all is said and done, what has happened is that, in the week before the local elections, the Government have decided to hand out £15 million in order to keep mortgage rates down from 10 per cent. to 9½ per cent. for a period of three months. That is what the Government have done, and anybody who is remotely affected is going to say, "Thank you for nothing". For the persons concerned, the relief offered is tiny and for a very trivial


period. The Building Societies Association itself has said that it neither wants nor needs this help.
I am bound to say that the number of wealthy organisations which say they neither want nor need £15 million must be very limited. If the Government really have £15 million to spare, they might switch their attention from this debate to the one we are to hold after it. A number of organisations concerned with the needs of disabled people would receive £15 million with much better grace than the Building Societies Association has apparently received it.
Has there ever been anything like this before, when a Government, in such an obvious electoral bribe, have waved this large sum of money about in a way that has no real relevance to the nature of the problem and have had it contemptuously rejected by the immediate recipient? I do not think that there is a previous such example. How on earth has it happened?
The Secretary of State had to defend it in the House a few days ago. When he was endeavouring to do so, I was reminded of a passage written by Adam Smith in "The Wealth of Nations" two centuries ago. Smith said:
It must be offensive to an intelligent man to realise that what he is saying is nonsense or very little better than nonsense.
How does it come about that the Government have got themselves into this position because, as was apparent last week and indeed, today, there is hardly any enthusiasm even among hon. Members opposite for the Government's position in the matter?
I think it comes about because, for years now, on the whole housing problem the Government have got their priorities completely wrong. Their willingness to produce a subsidy of this kind at this moment suggests that at least they have now grasped the fact that housing as a whole ought to be subsidised just as education ought to be subsidised, because if any of our fellow citizens are desperately deficient either in education or in housing this is an injury not only to them but to society as a whole. This is the case for subsidising all housing, whether it be for council tenants, private tenants or owner-occupiers.
But the Government have their proportions desperately wrong. Having at last got to the idea that all housing ought to be subsidised, they should look at what range of help they are giving to the various categories of people. But what has happened? It is still true, despite the growth of owner-occupation, that, if we want to deliver most of our fellow citizens from the misery which inadequate housing means, the first priority ought to be the increase of council house building of the kind of properties which people can rent at rents they can afford. But between 1970 and 1972, the number of council houses completed dropped by about one-third and the number of council dwellings started dropped by about one fifth. As long as that kind of policy goes on, a great many of our fellow citizens will never be delivered from the evil of inadequate housing. If the Government had £15 million to spare, they would have been better advised to use it to build accommodation to rent at rents which the great majority of our fellow citizens can afford.
The second error which the Government have made—and Conservative Governments have made it ever since the Rent Act 1957—is to pursue policies which have made it possible for people already reasonably well housed to be a bit better housed and for people who are inadequately housed to be pushed a further rung down the ladder. That is the effect of a policy which offers a subsidy of this kind to owner-occupiers, which will be handed out to them without question of need. I do not suggest that the effect of the subsidy will be very great one way or the other, but, in so far as it is taken and is without means test, it will help some who are already tolerably well housed to improve their position—and all this side by side with the Housing Finance Act, which will make it more difficult for people who are already in difficulties to get themselves tolerably well housed. If we add to that the steady discouragement of the building of council houses, illustrated by the figures I have quoted and by the Government's publications, it will be seen that it is even harder for those in a difficult position to improve that position.
I mentioned two charges against the Government—their lack of proportion, their driving of a wedge so that those


already not too badly-off have an improved position and those in difficulties are pushed further down. My third charge concerns why the Government were driven to this ridiculous expedient which, when it was announced in the House last week led to only one hon. Member opposite managing to get to his feet and express a word of approval for the Government against the chorus of disapproval from all sides.
The Government have been driven to this ridiculous expedient because they are not prepared to take effective measures against the causes pushing up the price of houses and, beyond that, the price of land. Such action would require severe measures. Drastic powers would have to be given to local authorities to take possession of houses left unoccupied because the owner believed that it would pay him more to wait another six months and sell at an inflated price rather than let someone use the building at once.
I have referred to this before in the House. The Government take not the smallest notice. I would not seriously expect them to do so because, basically, they are more interested in people who own land and houses than in people who want to live on the land, in houses. That is what the Conservative Party is for. We want effective measures with drastic powers of requisitioning by local authorities and an effective public authority with drastic powers to bring land into public ownership. We cannot expect that from a Conservative Government. That is why we are landed with this admittedly ridiculous, inadequate and electioneering proposal.

5.3 p.m.

Mr. R. A. McCrindle: I am never sure whether it is a virtue in politics to be consistent. If it is I would lay claim to having been one of the very few hon. Members on the Government side of the House who, since the Budget proposals, has drawn attention to the fact that there was bound to be a considerable effect on owner-occupiers. Having been one such hon. Member who drew the Government's attention to that situation, I must welcome the assistance that is forthcoming from the Government as a result of their announcement last week. I am bound to

tell my hon. and right hon. Friends that I do so with substantial reservations.
Having pressed the Government in this way it is incumbent upon me to say why I feel that some aid should have been forthcoming to owner-occupiers at all. I begin from the premise that nothing is more important than that phase 2 of the Government's counter-inflation policy should succeed. Secondly, there can be no denying that the increase in the building society rates which we have experienced in the last few weeks spring directly from the Chancellor's action in the Budget to stimulate National Savings.
I have no doubt that it was right, in the interests of a counter-inflation policy, so to stimulate national savings. If that is the case I must point out that it is also right for the Government to take all reasonable steps to contain essential family costs thereby making the phase 2 wage increases more acceptable than would otherwise be the case. If it is right to give this assistance I can think of several ways in which I would have preferred it to have been given.
When I raised this matter in the House on 8th and 22nd March I asked whether the Government would consider reducing the rate of tax paid by building societies. Here I must make a sharp criticism of the Treasury. I was surprised to find that the answer given by the Chief Secretary was to the effect that mortgage rates were of no particular concern to the Treasury Department. Events in the last few days have seemed to take rather a different line.
I suggested that the rate of tax paid by the building societies should be reduced during 1973–74. I did so because I feel, rightly or wrongly, that there will be a tendency for interest rates to begin to fall in the next year or so. If that is so it would be much better to give this assistance on what might be called a year-to-year basis. This would also have the advantage that it would not be a grant or subsidy. It would be a method of leaving in the building societies' funds additional resources which they could then take care of in a suitable way. That may mean that they would not extend equal assistance to everyone. They might chose to give particular assistance to those borrowers in greatest need.
As a second alternative I suggested— and I devoutly hope that this is something to which my hon. and right hon. Friends will give consideration-—that the first £40 of interest on a building society investment account should be income tax free in the same way as the first £40 of interest on a Trustees Savings Bank account is income tax free. If that were done the vast new inflow of funds, perhaps from a section of society that at the moment does not even think of investing in a building society, could be so considerable that a large measure of the difficulties could be ironed out. I hope that this is still something to which my hon. and right hon. Friends will turn their attention in terms of preventing similar crises in future.
Thirdly, if we are looking for rather better ways of assisting owner-occupiers by a distribution of £15 million, much more help and of a much more less temporary nature might well have been extended to the option mortgage borrowers. The option mortgage system, having brought owner-occupation within the reach of a great many people who would otherwise have found house purchase too expensive, is something that should now be examined in the light of some years of operation.
I hope that the Government will take the opportunity, in consultation with the building societies over the next three months, of seeing how we can so improve the scheme that in future it not only helps young purchasers through a reduced rate of interest but also provides assistance with the deposit. Hon. Members on both sides seem to overlook the fact that while interest rates are important, if we were to ask a young couple about to purchase their first home which was more important, assistance with repayments or assistance with the deposit, I have no doubt at all that they would reply that assistance with the deposit was the more important.

Mr. William Molloy: I can see a great deal of sense in what the hon. Gentleman says about the system. Does he not agree that when we last debated this matter the proposition was made, from the Government side of the House, that young people ought to be encouraged to buy their houses and then sell them four or five years later to make

a profit? How can he reconcile what he is saying with that submission?

Mr. McCrindle: I cannot recall that submission. The hon. Member will be interested to know that I will develop this argument a little later. I hope that for the time being he will contain himself.
Discussion of the cost of repayment and the cost of a deposit brings me to the question of the building societies. I have had some experience of building societies and I have found them, particularly in the last few years, singularly lacking in enterprise and having an insufficient capacity for forward planning. I listened to what the right hon. Member for Grimsby (Mr. Crosland) said about the creation of a stabilisation fund. I believe that there is a great deal of merit in the creation of such a fund, but it should not and need not come from Government resources. It should and must come from a redeployment of the building societies' resources so that, with luck, by holding back to a minimum extent in good years societies prevent the recurrent mortgage famine of the last 10 to 20 years.
Building societies' lending terms are considerably in need of revision. If I were a young man looking for a first mortgage and if I were to walk along my local high street on a Saturday afternoon, assuming that there were six building societies with offices there—not an improbable situation—I would take an even bet that only one of them would be prepared to lend to me over a term in excess of 25 years. I fail to see why. If I were prepared to pay for my pension over my working lifetime, and if I were in rented accommodation during the whole of my working lifetime, I see no reason why the building societies should not progressively become more prepared to extend the mortgage repayment terms.
I envisage the building society approach changing whereby a prospective owner must have 10 or even 20 per cent. of his own money involved. The number of building societies which would give me a 100 per cent. mortgage is very small. I suggest to the building societies movement that the time is coming when that matter, too, will become part and parcel of the operation. I see no reason why a borrower who wants to know exactly


what his costs will be over the period of the mortgage should not be able to obtain the mortgage on a fixed-interest basis, paying perhaps half per cent. more than other borrowers. Yet that is almost impossible in the building society movement.
The building societies must develop new ways of attracting money. The business of having a vast inflow one year and a famine the next is not good enough. I should like attention to be devoted to a dimension in building society investment which, as far as I know, is not practised in this country. If inflation has taught us anything, it is that if we are to invest our savings there should be some prospect of capital growth. But there is no capital growth in a building society investment. Certainly investors have security and a good rate of interest, but they do not have capital growth. Yet underlying building society transactions is the purchase of a property and in no other respect has the capital gain been greater in the last 10 years.
The borrower, who borrows at as cheap a rate of interest as possible, has a sizeable capital gain. I put it to the building societies: is it impossible to share this capital gain with the investor? If we were to introduce a new type of building society investment within which there would be a potential sharing of the capital gain of the ownership of the home resulting in investors placing their money with societies at a much lower rate of interest than they have to pay now, would it not be in the best long-term interests of the movement and of the prospective owner-occupier?
I should like to expand in a future debate some of the thoughts which I have mentioned today. I return to the proposition which the Government have put before us. I shall have no difficulty in supporting the Government in the Lobby because, as I said at the beginning of my remarks, it will be consistent with my demand for help for owner-occupiers. To those of my right hon. and hon. Friends who may feel that they must oppose the Government's move for what are called interventionist reasons, I say that many millions of my constituents and theirs who do not understand what inter-ventionism means have noted that some Government assistance is forthcoming and are grateful for it.

5.15 p.m.

Mr. John Pardoe: A major theme of the period when the present Government were in opposition was the breaking of the then Labour Government's promises. On nothing was greater vehemence expressed than on the Labour Government's broken promises in housing. The last paragraph of the Conservative Party manifesto in 1970 read:
Under a Conservative Government, the gap between the politician's promise and government performance will be closed.
The record relating to the Labour Government's housing policies which in opposition they sought to put before the public was discreditable, starting with the promise made by the then Mr. George Brown in Derby in September 1964 when he said:
For the new mortgages we have something in mind of the order of 3 per cent. 
We progressed through various other promises of the Labour Party in opposition. In an election broadcast in October 1964 the then Leader of the Opposition said:
We believe the Government should act positively to help owner-occupiers by lowering interest rates …
No one can deny that what the Labour Party said at the time was discreditable and perhaps it was best summed up in an article in the New Statesman in September 1970 written by the present Opposition Chief Whip, who said:
As one of the politicians involved, I admit to being thoroughly ashamed that my term of office did not produce anything like the approach that is needed to solve the problem of housing.
The Conservative Party, I suppose rightly, belaboured the Labour Party's record. As the right hon. Member for Grimsby (Mr. Crosland) said, the Conservative Party said on page 18 of its manifesto:
The increase in the cost of new houses and the highest mortgage interest rates in our history have prevented thousands of young people from becoming owners of their own homes.
Even today, three years later, one can almost visualise the tears dripping down the face of the Prime Minister when he penned those words.
The Conservative Party belaboured the Labour Party for having increased mortgage repayments by £3 a week. The situation now depends on whether one


takes repayments on an 80 per cent. mortgage or a 100 per cent. mortgage, but, taking the 100 per cent. mortgage, I calculate that the mortgage repayment on the average-priced new house since the Tories came to power has risen by £8 a week. As a proportion of the average industrial earnings, the repayment has risen from 30 per cent. to 50 per cent. in less than three years.
It was that figure which the Secretary of State for Trade and Industry deemed to be the most important. He said:
The true problem arises when the relationship between the cost of a mortgage and the average industrial wage gets so much out of line that the person with an average industrial wage cannot buy a home of his own."—[OFFICIAL REPORT, 15th May 1969; Vol. 783, c. 1663.]
That is no bad starting point from which to judge the Government's record, which has been blown sky high in the last week.
It is not only a question of the Conservative Party manifesto—one might decently bury a document which is nearly three years old—because the Conservatives arc still at it. They published leaflets recently. One of them, produced by the Conservative Central Office, was headed,
It's all happening … as promised.
It referred to the lifting of hire-purchase controls and the modernisation of banking systems. It referred to a
Housing policy that concentrates help on the needy … as promised".
Such leaflets have been distributed in my constituency in the last two weeks. They talk about streamlined methods of decision making as promised. Certainly there has been no more streamlined decision taking than this. In particular they say:
Council tenants have been encouraged to buy their homes—as promised.
Let us take that last point. I have done something to persuade one or two councils in my constituency in principle to sell houses to tenants where they are not needed for other and higher social purposes, and in Camelford Rural District Council area, which is part of my constituency, in the last week tenants have received a letter from the council which offers them a chance to buy their houses at £6,000 and the repayment quoted—we have to take the gross weekly

cost for the moment—for 25 years is £12·83 a week, and the figure for the mortgage option scheme is £10·1. That is for a council house the rent and rates of which at present are £3·85—a figure of £10·1 a week when average industrial earnings are £36 and the average earnings in Cornwall are nearer to £20 than £25 a week. It transpires that the promise which the Government made to make it easier for council tenants to buy their houses is in total collapse. That promise will never be kept.
Why have interest rates gone up? As everyone knows, they have gone up primarily because of inflation. I have always been amazed that people have been prepared to lend their money for nothing or even less—because that is what a good many people have been doing, investing in national savings, trustee savings banks and building societies. Why should I lend when I shall actually lose by doing so? If I lend to a building society at 6·75 per cent. tax free I am the fool in the phrase, "a fool and his money are easily parted." For the fool who invests £100 for a year with a building society at those rates net of tax may expect at the end of the year to have £10675. If inflation is at 8 per cent. he will have no such thing. He will have only about £93·40.
Why, the Government may well ask, could anyone, fool or wise man, expect a rate of inflation of 8 per cent.? The Government, who promised to check price rises at a stroke, did not, and refused statutory intervention on prices and incomes until the eleventh hour. Even now they insist on beating their breast and telling us they do not really believe in it but want to get back the old free for all as soon as possible, and their pay norm is £1 plus 4 per cent., of average industrial earnings. Their policy is inflationary; their attitude to the prices of food seems to be to let them rip. The possible alternative to the Government—the official Opposition—are totally opposed to any kind of wages policy and their domestic policies add up to a rag-bag of the most inflationary devices ever put forward by any political party on earth and possibly elsewhere.
In my view, inflation will continue, and probably at the present level, and, may even continue at higher levels. The Chancellor of the Exchequer tells us this


is a bridging loan to carry over the position for three months and by the end of three months something miraculous will have happened to interest rates and they will have come down to a lower level. I do not know whether they will go up or down. Nor does the Chancellor. The Times reckons interest rates will go up to 17 per cent. and the Economist reckons they will fall. It is anyone's guess.
Certainly inflation is here now and I must admit that not even my party's policy will stop it, although I believe that our policy of a selective tax on those who cause inflation would do more than anything else to help get it down. If we want to check the money supply, as indeed we do, we must accept higher interest rates, for the only alternative, I suppose, is rationing, and that seems to be the sum total of the choice. Did not the Chancellor know when he made his announcement in the Budget about national savings and interest rates that it would have the very effect on mortgage interest rates it has had? There was an instantaneous reaction, at a stroke, and interest rates at a stroke went up in every field as soon as he ended his speech. He should have gone to the capital market for his borrowing requirements and he should have had a growth-linked bond encouraging people to invest in the growth rate in the economy.
I admit, that the Government are in a dilemma, but it is a dilemma entirely of their own making. When all is said and done, we have a Government who subsidise housing costs of that section of the electorate from which they expect greater political support, while at the same time they remove subsidies from the housing costs of that section of the electorate from which they expect less political support. Such a Government cannot possibly claim that they are following a one-nation approach. An hon. Member here is again accusing my party of having supported the Housing Finance Bill. We did not.

Mr. Skinner: They voted for it.

Mr. Pardoe: We voted against it, and we made it quite clear what we were doing. We proposed numerous Amendments to it.
The Government cannot escape that that Act will remove £300 million from

the pockets of council house tenants by 1975–76 while at the same time allowing the benefit of income tax relief on mortgages whether for a swimming pool, a garage or whatever, to rise. The Government, like the last are a two-nation Government.
That is their own affair, but when they use taxpayers' money to buy votes from a more favoured section of the community that becomes the public's affair with a vengeance and I must say that it seems to me to be a piece of political sculduggery of the very worst sort.
I come to a question about the operation of the pay code formula and the announcement made today. Can the Minister tell us whether the pay code formula of £1 plus 4 per cent. means that the extra benefit gained by those who pay fixed-interest rates on mortgages, from, for instance, their employers, will have to count the notional benefits of what they would have had to pay, against the formula of £1 plus 4 per cent.? Can he tell us whether the building societies, which have not exactly welcomed this subsidy, categorically told the Government before they offered them this money, that they would otherwise raise their rates to 10 per cent.? How did the Government know that would be the rate? Is the taxpayer being asked to pay to stop something which would not have happened in any case?
What are the solutions? Something far more radical than the suggestions we have had from the Government and Opposition this afternoon. The right hon. Member for Grimsby put forward a scheme to stabilise mortgage interest. This is a buffer stock. I am inherently suspicious of buffer stocks whether they be on corn or copper or mortgages. Indeed, we already have one because there is a difference between the statutory level of the building societies' reserve and the national level of the reserve. I agree there is need for this present reserve. Would not the building societies and the Government have been fired at had they kept back money in years of plenty? They would have been fired at from all sides for doing just that.
The question is how to get people to lend to the building societies. I agree entirely with the hon. Member for Bil-lericay (Mr. McCrindle) that theoretically


it should be very easy because investment in property is the best hedge against inflation, and I agree with him because I have a mortgage of exactly that kind where I share the equity with the person who lends the money. It is, unfortunately, not entirely certain that the present law allows this, because there are various decisions of the courts against a clog on equity. It would be helpful if the Government could clear this up and ensure that the law allows it.
The real answer to the problem of housing finance lies in the tax credits scheme, in a replacement of the mortgage allowance and rent subsidies and rebates by housing credits or allowances. The mortgage interest relief must be abolished and replaced by a housing allowance payable as of right to any person with a mortgage. This would automatically limit the value of the house on which the Government are prepared to give help. It would, moreover, allow only one housing allowance and would therefore not allow second home mortgages. I agree with the right hon. Member for Grimsby that these should be abolished immediately.
In our view, the introduction into the tax credits scheme of housing allowances and credits would bring a new fairness and a new equality between those who rent and those who buy their properties, which is the real answer to the problem.

5.31 p.m.

Mr. Peter Trew: I listened with interest to the remarks of the hon. Member for Cornwall, North (Mr. Pardoe) about a housing allowance. No doubt the Select Committee on tax credits of which we are both members will be considering that. I hope that he will forgive me if I do not follow him on that point.
I must begin by declaring an interest in housing development.
The £15 million bridging grant flows, almost as a logical necessity, from the Government's pursuing in parallel the twin policies of stimulating economic growth through a high borrowing requirement and action on countering inflation. I have yet to hear any hon. Member opposite say that they do not want economic growth or that they do not want inflation to be controlled. The

country is now getting economic growth at a rate that we have not had for many years, and all the indications are that phase 2 of the counter-inflation policy is being successful.
Therefore, while I do not particularly welcome the £15 million bridging grant, I do not particularly condemn it. I believe that, in the circumstances, the Government had little option. In any event, there are more important problems associated with housing finance which have to be considered.
I welcome the Government's intention to look into the regulation of the flow of mortgage funds. The building societies have been greatly criticised because, during 1972, a year of mortgage surplus, they did not cut back on their lending. This criticism implies that it is the job of building societies to regulate the flow of funds. If it is a matter of public policy to regulate the flow of home purchase finance, that is a job for the Government and not for the building societies, although in practice the societies do achieve a measure of regulation by varying their liquidity ratios.
It is also suggested that the building societies should favour young couples buying their first home. They do this to a certain extent already but if it is a matter of public policy to favour one type of purchaser and one type of house over another, that is a matter not for the building societies but for the Government and Parliament.
The Government have at their disposal a simple tool both for regulating the flow of mortgage funds and for discriminating between one type of house purchaser and another. It is a device that we have used for many years on hire-purchase transactions, namely, legislating for a minimum deposit. This would effectively control the flow of funds and could be used to discriminate as between one type of house purchase and another. For example, there could be a relatively low minimum deposit required for the first purchaser of a new home and a relatively high deposit for the purchaser of a holiday home.
Whether it would be necessary to run such a policy in conjunction with a mortgage stabilisation fund, I do not know. Certainly the idea of such a fund is


superficially attractive. It is not a particularly original idea. It has been kicking around for a long time, but it has two potential snags. The first is its possible effect on the money market. This can best be illustrated by looking at 1972, a year of mortgage surplus.
During 1972, the total mortgage advances were £3,600 million, a massive increase of £800 million over the previous year. With the wisdom of hindsight, it might be argued that the building societies should have advanced say £400 million less, but what would they have done with the money? If they had put it into local authority funds or into gilt-edged stock, which are the only places they can put it, the injection of that very large sum into the money market would almost certainly have forced down interest rates to a level too low to service the building societies' own borrowings from their investors.
In the case of gilt-edged, a further problem might have arisen on realisation. Had they invested in gilt-edged in 1972, they would have been selling that stock during 1973, to make good their present shortages. But of course, the market for gilts is now depressed because the Government themselves are trying to sell large quantities, and the building societies would have suffered a loss.
Losses of one kind or another may well be inherent in the very idea of a mortgage stabilisation fund, which requires the finding of investment outlets in times of plenty, and therefore of low interest rates, and the realising of assets in times of dearth, and therefore of high interest rates.
If the Labour Party opposite do not like the £15 million grant which the Government are making to the building societies, they must face up to the fact that a stabilisation fund could well involve a much bigger contribution by the taxpayer to the building societies and of course it would again be an indiscriminate contribution because it would make no distinction between poor borrowers and rich borrowers.
There is a further snag inherent in the idea of a stabilisation fund. It is based on the theory that years of surplus are more or less equally balanced by years of famine. But in practice that is not so.

There are four times as many years of famine as there are years of surplus. In order, therefore, to keep the stabilisation fund topped up, building societies would have to keep their interest rates artificially high.
The solution could be to look for new sources of home purchase finance. Insurance companies and local authorities already do something; perhaps they could do more. Perhaps pension funds, private investment portfolios, even trade union funds, could enter the mortgage market.
I welcome the Government's intention to look into the problem of regulating the supply of mortgage finance, but it is worth making the point that there must be not only a supply of mortgages but also a supply of building finance, particularly for the smaller builders who are very dependent on bank borrowing. It is no good, on the one hand, providing the wherewithal to build houses if, on the other, the small builders who make a great contribution to the building of houses for sale are no longer able to build for lack of finance.
The building societies have suffered much criticism, but it needs to be said that they have served Britain well. The home purchaser in Britain can get a better deal in terms of length of loan, size of loan and rate of interest, even at the present high levels, than in practically any other country. The building societies have made a massive contribution to the extension of home ownership in Britain and it is now up to the Government to provide them with the framework which will enable them to do even better.

5.39 p.m.

Mr. John Forrester: Despite protests to the contrary, the Government have to accept that they are largely responsible for pushing up interest rates. They are hoist by their own petard. The final straw was the Budget's national savings proposals and the £4,000 million borrowing requirement, which has had the effect of leaving the building societies stranded in this muddy junction. It was obvious for months that money was flowing out of the societies at a much faster rate than it was coming in or, at least, that they were getting less money to retain in their reserves. The warning signs should have been clear to


the Government a long time ago and the Government should have been prepared to take action at the time of the Budget, or even before then.
It is much too easy to suggest, as the Minister tried to argue this afternoon, that this is all due to Christmas and VAT consumer spending sprees. No doubt that spending has had some effect on funds going out, but my information is that a lot of money has gone from the building societies into fixed-income bonds and local authority loans, and by the very nature of these commitments it will be a considerable time before that money comes back into the building societies. So the Government have themselves created this vicious inflationary merry-go-round from which neither ratepayer, householder nor tenant can alight; and they have managed to make city treasurers frantic and building society chiefs demented all at the same time.
The glut of money which was available to building societies over the past two years has helped to push up house prices —I confess that the Housing Finance Act was a very efficient assistant, too—but the present shortage of money is having the effect of making many people revise the prices they ask for their houses, so it may be that it is an ill wind that blows no one any good, and this effect may be just one crumb of comfort in this terrible situation. Building societies have a responsibility to challenge the house prices that are being asked. They are in a unique position to bring their influence to bear on the market forces, although I do not think that we should overestimate their obligations or suggest that the Government have no part to play.
We are always being told that a house, even at a 10 per cent. rate of interest, is a good buy, that it is the only good hedge against inflation. It certainly is a good hedge against inflation. "Think of the capital gain you are making," we are always being told, but I find that more and more people are beginning to realise that one cannot eat a capital gain from the house in which one lives. It is true that a man's descendants may spend it for him after he has gone, but it is not much good to him while he is living. It is little comfort for someone to be told that his house

is worth £X thousands now as he goes to pay his last mortgage instalment from his first retirement pension payment.
A stabilising fund is extremely important and I am glad that the Government are now proposing to do something about it. I do not minimise the difficulties— it is a very difficult problem to solve, and probably only the Government of the day can solve it. We have been told in the last few days that the liquidity rate of the building societies has been reduced from about 17 per cent. to 13 per cent. and this in itself is a kind of stabilising fund. It is, however, still a long way off the statutory requirement of 7½ per cent. and I wonder whether the building societies themselves could not reduce then-reserves to 10 per cent. and thus release a considerable sum of money at this time of famine.
It is possible that if the societies took this action the Government would need to give them some guarantee in the unlikely event of their being embarrassed in the future by taking such a step. It is also clear that not all building societies have reduced their reserves to 13 per cent. Some have considerably more money than that in hand and might well be asked what contribution they could make by reducing their reserves and so pump some money into the housing market.
The House will be aware that many local authorites are now virtually minor building societies. In Stoke-on-Trent we have 2,000 mortgages outstanding to a tune of some £2 million. The House will quite clearly appreciate that these figures emphasise the fact that local authorities are lending money on older-type property to people with very low incomes—the sort of people about whom the building societies do not want to know.
This is an invaluable service for the less affluent members of society, but the local authorities have to borrow their money on the open market. I am told that the present long-term rate is between 9½ per cent. and 10 per cent. while the temporary money rate is from 10 per cent to 12 per cent. If a ¼ per cent. is allowed for administration, as is the case in Stoke-on-Trent, it is quite clear that local authorities could be losing money by providing this service to the very people who can get it from nowhere else.
I therefore hope that the Minister will tell us whether it is the intention of the Government to channel some of the subsidy to the local authorities to compensate them for any loss they may incur. Unless such help is given the burden will fall on the ratepayers who, I suggest, have not yet recovered from the bitter taste of the rather poor £10 million rate relief that has been given to them. Yet without this local authority service many more people will be driven on to the council housing waiting lists or into the private sector, and possibly further inflate the inflationary spiral there.
Much sympathy has been expressed, as it always is, for the lower-paid people who need mortgages. The option mortgage scheme certainly helps, but it is the surtax payer who has the most to gain from having a mortgage. The tax relief is so heavily weighted in his favour that he is encouraged to buy big and pay long and so sterilise funds which could be more usefully used elsewhere for those with greater needs. They will be encouraged by the increased subsidy which they will get under the Government's propsals. It is socially and morally indefensible to give them extra money now.
I should like to see building societies charging a differential interest rate for, say, mortgages of £10,000 rising by ½ per cent. or so up the scale. That would release money to enable building societies to keep their interest rates lower for those who pay less and can only afford to pay less. If that is not acceptable to the building societies, the Government might remove the surtax concessions which these high income bracket people get and return that surtax money to the building societies to help them keep their interest rates down.
It is a stark truth that many young people are now being driven into the rented sector or into buying inferior property which at some time in the future they may very well regret having hung round their necks. The rate of house price inflation means that their savings do not match the increase in prices and their dreams of a home drift further and further away.
Since last autumn—because it must be remembered that interest rates went up last autumn also—the cost of a £5,000 mortgage has gone up by more than £60

a year. According to my arithmetic, that means that a man has to earn about £44 a week before a building society will agree to lend even this modest sum, yet most of my constituents do not earn anything like £44 a week and will find it extremely difficult to find that sort of money in order to set up a home. The 1½ per cent, increased rate of interest will mean that many who already have mortgages will find themselves going over the top of the income-repayment ratio which the building societies recommend. I know that they will be told that they can extend the period of their mortgage perhaps from 25 years to 39 years, but what a millstone is being put round their necks.
What an irony it would be if the Government's policy resulted in our having to build more houses to rent because fewer and fewer people could afford to buy.

5.50 p.m.

Mr. Arthur Jones(Northants, South): I was interested in the passing reference made by the hon. Member for Stoke-on-Trent, North (Mr. Forrester) to building society valuations. I wish to turn to what I see to be the essential role of the building societies and to the work of the Building Societies Association. I do so as one who has considerable professional links with the building societies and who recognises the unique position that they hold. I think it is right to say that they are unique in the world and that there are no institutions elsewhere in the world such as the building societies which we know in this country. They play a very important role by offering a very attractive method of saving to a large number of depositors. They also play an essential role in the extension of owner-occupation.
Tribute has been paid both by my right hon. Friend the Secretary of State and by the right hon. Member for Grimsby (Mr. Crosland) to the important part which the building societies have to play in our housing programme. They engage in that disastrous financial occupation: they borrow short and lend long. That is one of the difficulties facing us in the present circumstances, But, as my right hon. Friend said, they have assets in excess of £15,000 million, and the value of their work is recognised by the fact that they enjoy a composite rate of tax which enables them to have a very simple method


of granting tax-free interest on money deposited with them.
In this context I wish to look briefly at what happened last year in the housing market. Clearly it was a sellers' market. As this became recognised those wishing to sell houses began to put up the asking prices. The building societies had an immense flow of funds into their reserves, and they began to look for ways and means of putting out this money. As a result they began to up-value properties nearer to the asking prices.
It is true that most building societies employ their own valuers. As a result I think that we saw a situation in which there was a substantial increase in asking prices and the building societies began to up-value properties and thus enabled would-be buyers to get the benefit of large mortgages. This in turn enabled buyers to pay higher prices, and this fundamentally was the cause of the escalation in house prices that we have seen over the past 12 months.
There was an unprecedented flow of money into the building societies. They were committed to putting this out in a way which in their judgment best suited them. At the same time they also lowered the relation between the income of an applicant and the proportion that his income should bear of mortgage repayments. We had these two constituent factors—increased valuations and making it easier for people to take on larger mortgages. I think that this led substantially to the situation to which I have referred.
It was not just buyers who saw the opportunity. It was those who recognised that one of the cheapest ways of borrowing money was to borrow from a building society because they had tax concessions. Many people who had low mortgages on their houses realised that if their houses were valued at current levels they were able to increase their mortgages. Many building societies granted increased mortgages on this basis and people used the money for all sorts of purposes. They bought cars. They went abroad on holiday. They refurnished their houses.
In addition there were those who wanted to improve their properties. Here again they made application to building societies, and their applications were con-
 

sidered favourably by most of them. If we care to look into a large number of cases, I think that it will be found that people had the benefit of revaluations of their properties far in excess of the cost to themselves. Here again the building societies made substantial additional resources available and thus increased the money supply in the country from the substantial increase in the deposits made with them.
Furthermore the banks added to this inflationary situation by granting generous bridging and short-term facilities. This is fundamental to the escalation of prices that we have seen, and land prices nave followed automatically. We have had a tremendous uplift over a 12-month period. Some estimates that I have seen put it as high as 100 per cent. Understandably builders and developers selling at the increased values secured unlooked-for profit levels in their developments. But this is an essential ingredient in the situation that I have outlined.
What the building societies should have done in these circumstances, recognising their obligation to their depositors in terms both of interest rates and of their security, was to limit valuation increases. They should have retained their usual practice with regard to earning-repay-ment ratios and they themselves should have considered carefully what has been advocated today on both sides of the House, which is the creation of a stabilisation fund. I know that this would have meant that their retention would have increased and their ability to pay a high rate of interest would thereby have been prejudiced. But they must have known that this rate of escalation could not go on indefinitely. These measures would have done a great deal to preserve market stability in house prices. After all, the policies of building societies must be directed to this end.
Here a heavy responsibility rests on the Building Societies Association whose responsibility it must be to look at the implications of the aggregate policies of their membership and to see the extent to which the public interest is being served.
Now that we have got on to this high plateau of house and land values, we shall not see any significant recession. If past experience is any guide, we are unlikely to see prices drop by anything
 


in excess of 5 per cent. In other words the damage done last year is irreversible.
The building societies should now consider the social objectives of the vast influence that they have with the sums at their disposal which we are told are in excess of £15,000 million. We should expect them to ensure the most favourable possible terms for first-time buyers. They should establish a method of priority for advances in this and other ways. They should have a degree of social objectivity in their policies in addition to their essential duty to protect their investors. I welcome what my right hon. Friend the Secretary of State said about the negotiations into which he is entering. I have no doubt that he will be engaged in those personally.
I hope that the Government will not think just in terms of a stabilisation fund. I hope that the wider questitons, to some of which I have referred, will be considered carefully. The history of the building society movement confirms that we are likely to get a ready response and that there will be recognition of the important part that they have to play. There is a public duty which rests upon them. Understandably in this respect it may restrict their individual objectives and ambitions. But I am sure that if this is clearly required in the public interest the Building Societies Association will find it readily agreeable to its members.

6.0 p.m.

Mr. Ted Rowlands: The hon. Member for Northants, South (Mr. Arthur Jones) has, in his usual temperate language, pronounced one of the most savage indictments of building societies and their operations over the last 12 months that has been heard in the House. Many of us share his analysis of the situation.
The hon. Gentleman said that the building societies had made an unfortunate and a very large contribution to the problem of house price inflation. However, the hon. Gentleman did not touch on the consequences of that inflation not only in terms of the housing market in general, but, more particularly, for a very large number of individual house owners who have been in the market in the last 12 months.
I have a nightmarish feeling that thousands of householders are now landed with debts which a short while ago they could not have envisaged themselves being saddled with—in other words, they have millstones round their necks.
If the bottom were to fall out of the housing market and the householder's capital assets, his home, to plummet, building societies for the first time could have a significant number of defaulters on their mortgages. One of the great features of the building society movement is that the number of defaulters on mortgage payments is negligible. However, the level of monthly repayments, especially with the further increased interest charges, is horrific and people have put themselves into hock for huge sums.
One aspect which the hon. Gentleman omitted from his review of the situation was the operation of housing supply last year. The Government repeated the fallacy of assuming that, if local authority housing were cut back, private sector housing would increase and more than adequately make up the difference. However, in practice this has never happened. All figures since the war show that, when local authority housing is cut back, although there may be some increase in private sector supply, the total number of houses built falls.
For example, the total number of new houses built in Wales in 1972 was the lowest since 1946, because in areas like mine—the valley areas—there was a tremendous cut back in local authority housing. The Government's discouragement of this sector, together with the operation of the Housing Finance Act, prevented local authorities from building. The number of new local authority houses built has dramatically fallen. The few gains in the private sector have not met the loss in the local authority sector.
This has an effect on the private house market, because more and more people are driven to try to buy in the private sector. I will tell the House what the real tragedy—or one housing trap—is as created by this Government's policies, particularly in constituencies like mine. The Government have successfully managed to prevent working-class couples from buying themselves into the private house market for the first time.
In my constituency the extent of owner-occupation is 60 per cent. to 70 per cent. Now that the first rung of the housing ladder has been raised it is too high for working-class people. Eighteen months ago a young couple could buy a house in Merthyr Tydvil for £1,000 or £1,500 and, with the grant, have a marvellous house for the expenditure of £2,500. Today house prices in Merthyr Tydvil start at £2,500 or £3,000 for unimproved property.
The result of this is that a very large number of young people who might have been able to buy in at the bottom end of the private sector cannot now get on to the first rung. So they turn to local authorities for housing. Local authorities have not been able to build enough houses in the last 18 months. Therefore, these young people have been caught in the housing trap.
This debate should be not just about a stabilisation fund and the financial juggling of Governments and building societies, but about the growing problem of homelessness. In constituencies in South Wales, an increasing number of young working-class couples, instead of talking and thinking about a property-owning democracy, in the language of "A Better Tomorrow", will have to live in the front room of their parents' home. Tensions will thus be created.
I have been staggered over the last few months at the number of people who have come to my surgery on Saturday morning and who have been separated as a result of the tensions which have been brought on by their living in the front room of their parents' home. The young children, perhaps, have got on the nerves of middle-aged or elderly grandparents. The young wife stays with the parents and the young husband returns to live with his people.
This afternoon the Secretary of State talked social and housing gibberish. His approach is that a means-tested policy is all right for rents, but for mortgages there must be an indiscriminate open-ended subsidy. Where is the logic in that? How can anyone, even hon. Members opposite, square that? Why did not the Government decide to apply this £15 million to help out those most in need? Why was it not applied to finance

working-class home ownership, or to help people make initial deposits on houses costing £3,000, £4,000, or £5,000 —the House will understand that I am talking in terms of my constituency— instead of forcing them into homelessness or driving them to live in grossly overcrowded conditions with their parents?
That is our major indictment of the Government. It is not that they were caught by surprise. We warned them time and time again.
The debate has taken an ironic twist. It has been said latterly that the handing out of this £15 million subsidy is very much part of phase 2 of the counter-inflation policy. That argument does not stand up. This subsidy will not run till the end of phase 2. What happens if interest rates rise to 10 per cent. after three months? Phase 2 will not then be over. Will the Government return then with phase 3 building society subsidy? If there is to be further intervention on wages and prices in phase 3, will there be further intervention in the form of a building society subsidy to offset increased mortgage rates?
These questions have not been answered by Ministers. It is not that we do not believe in subsidies for housing. We do. We believe in subsidising home ownership and housing built to rent. I believe in subsidised housing, because housing is a vital part of our social services. I have no qualms about subsidies.
But we indict this Government for their insensitive planning in housing over the last two years, their planning of resources and their unfair and unequal distribution of subsidies.

6.10 p.m.

Sir Frederick Corfield: I am sorry that it should have fallen to my right hon. and learned Friend the Secretary of State for the Environment to defend the aberrations that apparently go on in the Chancellor of the Exchequer's bathroom. My friends in the water industry tell me that we are heading for a drought. If that cuts down my right hon. Friend's baths and, therefore, the bright ideas which occur while he is in his bath, that must be proof positive that providence is on the side of the Conservative Government.
I take the view that if, in order to achieve growth, one goes in for printing money at the rate at which we have printed it, one is bound to have a very rapid increase in the price of houses, the number of which can only be increased very slowly. I have no doubt, as my hon. Friend the Member for Northants, South (Mr. Arthur Jones) has indicated, that that has been aggravated by some very old-fashioned practices on the part of the building societies. Moreover, I cannot see that paragraph 10 of the White Paper, which tells us that this £15 million is linked with the
operation of special factors which have temporarily affected the pattern of savings
gives us any confidence that this is a special pattern or that it is of a temporary nature. This makes it the less convincing.
One cannot help but wonder whether there are too many building societies in this country. After all, they fulfil a function which is analogous to the banks, and I have no doubt that we were very much better off a few years ago with the five main banks, and a few others, than we were at the beginning of the century.
One wonders, too, in view of the extent to which building societies and their functions are known, whether it is really necessary for them to have these prestige offices in every town. In consequence, one is bound to wonder whether the margin between the lending and borrowing rates is as low as it might be. One of the results is undoubtedly that many people now have commitments which they can meet only if inflation continues. So we have built into our society a number of people with a vested interest in that happening.

Mr. Eric Heffer: I think the right hon. and learned Gentleman misheard me. I agree with him that there are far too many building societies, but if we concentrate them into five very large societies it reduces the element of competition, and I should have thought that that was against Tory philosophy.
Does not the right hon. and learned Gentleman agree that the time has come for the Government to create a building society and for the money to be raised by taxation, allowing particularly the poor to get 100 per cent. mortgages at very low interest rates?

Sir F. Corfield: I do not think that that follows at all. I was comparing the building societies with the banks, but I did not want to be taken literally to committing myself to five. There are now well over 100 building societies, and it seems to me that a reasonable reduction would very much strengthen the reserves of those which were left. It is, after all, a question of reserves on which we depend if we are to think of stabilisation of any sort as a practical operation.
Having commiserated with my right hon. and learned Friend for having to defend that policy, I welcome the White Paper which looks ahead and which I am glad to say incorporates something of the philosophy which he and I tried to expound in the pamphlet to which he has referred. It is to that White Paper that I wish to address most of my remarks.
I am convinced that one of the major causes of high cost modem housing is lack of continuity in the building operations themselves. On a national scale this sort of stop-go operation, using the construction industry as a sort of economic regulator—of which the party opposite are as guilty as anybody, and perhaps more—is the sort of thing which produces bottlenecks in materials, which greatly increases the price of housing and lowers the efficiency of the industry. Since the war we have had this cycle, for example, in bricks. At one moment they are stockpiled, and small brick firms go out of business. The next, we are screaming for bricks because those firms have gone out of business. It is this failure to produce a continuous policy which is at the root of our problems. It is impossible for the local builder to plan ahead. It is impossible to keep an even employment level.
This also affects the assessments which are made, so wrongly, about the required training programme for craftsmen. Only 18 months to two years ago I was engaged in a somewhat acrimonious correspondence with an hon. Friend of mine in the Department of Education and Science which was determined to close down a very wide-ranging building training course in a technical college in my constituency. I was assured that all the forecasts of trades required were more than adequately coped with and that there was no foreseeable shortage. Now


we are screaming for more craftsmen— particularly plasterers and bricklayers. The assessment by the trade of its requirements has been abysmally inaccurate.
I have some fears—although I have no doubt that he will be able to allay them—that my right hon. and learned Friend's hoarding charge may have the effect of inhibiting this essential continuity. To many builders the land for which they have planning permission today represents not only what they are working on but their reserve for a number of years ahead. If they are forced to accelerate their operations to the three years which I think is allowable, they may well have no further reserve and this will have an inhibiting effect on the continuity that is necessary.
Therefore, I hope that my right hon. and learned Friend will be able to assure us that this is a matter which he has in mind and that an acceleration will be allowable only where it can clearly be shown that a properly balanced programme can be carried out on the basis of what the builder puts forward.
I think we overstress the effect of the price of land on houses. There is no doubt that the price of land is determined by the market for houses, rather than the other way round. We all know, for example, that if a builder were to acquire a large acreage of land absolutely free, gratis and for nothing, even though he was able to pass that saving on to the first purchaser, the first person who sold from the housing estate would cash in on the market price for houses. We would merely be transferring the profit from one to the other. I therefore regard with a little suspicion what is said in paragraph 20 of the White Paper which deals with the sale of land by local authorities. The White Paper says:
The Government is asking authorities to come forward with schemes designed for this purpose"—
that is, building houses for sale on land which they own—
and to make use of the permitted discounts from unrestricted market value ".
If they do that, they will pass on the profits to the first vendor amongst the first purchasers. I would hope that we would not be too enthusiastic for that method of helping the householder.

Mr. Arthur Jones: Does my right hon. and learned Friend not agree that we could have a pre-emption clause for a period of years, as in the case of the sale of a council house?

Sir F. Corfield: That is essential. I thank my hon. Friend for pointing it out. I was, indeed, coming to that point. But it is unfortunately a myth to believe that ultimately we pull down the price of houses. Finally, my right hon. and learned Friend must bear a share of the blame for the lack of land coming forward, because the time being taken to decide appeals is really scandalous. My right hon. and learned Friend states in the White Paper that a large proportion of local authorities have responded to the Government's request to review their planning programme and to review the amount of land they can make available. The implication is that some local authorities have not responded, and that that will inevitably mean that any landowner who believes that his land is suitable must appeal, and unless these appeals can be dealt with much more speedily than at the moment it will contribute to the bottleneck in land. That goes not only for appeals. In my constituency not long ago there was the case of a piece of land, just as my right hon. and learned Friend has described—not actually green belt but white land earmarked to be treated as green belt for the foreseeable future. The local planning authority changed its mind and agreed that it was suitable for development, but it took something between six and eight months to get a letter out of the Department saying that approval had been given. That sort of delay is every bit as damaging as the hoarding by the owner of the land, whatever be the motive.
I welcome the White Paper, however, and I have dealt with the few points which, from an inevitably cursory examination, have struck me as worthy of critical mention. I welcome the White Paper as a whole, and will support my right hon. and learned Friend, although I continue to sympathise with him in defending what I believe is a rather useless operation and a gimmick.

6.24 p.m.

Mr. Walter Johnson: With time so short I intend to stick to one aspect of this important subject.


Unlike my right hon. Friend the Member for Grimsby (Mr. Crosland), I do not absolve the building societies from some blame for the present situation. Over the last year, I have put down a series of Questions to Ministers asking for the whole matter to be referred to the Monopolies Commission. Now that the Government have made a gift of £15 million to the building societies, there is an even stronger case that the subject should be looked at by an independent inquiry to initiate a full and searching probe into all the activities of the building societies.
I have put a series of question to building societies in the area which I represent. Those questions have never been answered or refuted. For example, I have asked them how much money has been lent to property developers by the building societies—money which is exploited by property developers in the sale of houses, the prices of which have risen atronomically. I have attempted to discover how many people have more than one mortgage—two, or in some cases, three—enabling them to have additional tax relief on the interest which they pay. This also has been a drain on the building societies' funds.
Why have the building societies never stated how many people have more than one mortgage? This is a question that the Government should be taking up with the building societies. Why has it been necessary in the last five years for plush, swanky offices in every town and village throughout the country to be put up by building societies, some next door to each other?
Why could not building societies have a ceiling on loans during the last 18 months? If they had had a ceiling on loans to borrowers, it would have had a good effect on house prices. There is no doubt that the building societies were lending money indiscriminately, particularly during 1972. It had the effect of raising prices, and I believe that they bear a heavy responsibility for the astronomical increase of house prices which has taken place in this period. They made money far too easily available. Some of these questions should be answered by the building societies. That is why the Government should refer the matter to the Monopolies Commission or to some form of inquiry where these questions could be

delved into to see whether building societies are efficient organisations. I do not think that they are.
We have seen the effect of the 8½ per cent. mortgage rate going to 9½ per cent. For example, on a £5,000 house, a man will now have to pay £340 extra a month over 25 years. On a £10,000 house—and this is about the average price in the London area and many other parts of the country—a man will have to pay £6·80 more per month over 25 years.
I know that building societies invite people to extend the period of repayments, but I draw attention to the article in The Guardian on Saturday which showed what happens when a man extends his repayment period. The article cites the case of a man who bought a house in June last year. He would have got a 25-year mortgage at 8 per cent. In October the rate went up to 8½ per cent. and he chose to extend his mortgage period to 29 years.
Now the rate has gone up to 9½ per cent. An extension on a 29 year mortgage is, in the blunt words of one building society, a reach into 'infinity'. It means that if the man were allowed to extend his mortgage period, his weekly repayment would not even cover the weekly interest charges, and he would never start paying back the capital.
In all these circumstances surely there is a case for a full and independent inquiry, and I ask the Government to consider this seriously, particularly in the light of their spending of public money to assist the building societies.

6.28 p.m.

Mr. Hugh Dykes: I hope that the hon. Member for Derby, South (Mr. Walter Johnson) will forgive me if I do not follow his line of reasoning in detail. I am not sufficiently expert in the characteristics of the building society movement to be able to comment in detail, though I must say that in my experience of building societies my impression has been the reverse of that stated by the hon. Gentleman. They have always acted extremely conscientiously in the exercise of what is, in effect, a quasi-statutory function, and I believe that we should pay a tribute to the way in which they have assisted owner- occupation.
Hon. Members on both sides of the House are concerned more for that marginal category of persons—marginal in


numbers though not in social need—who are at the lowest end of the income scale, particularly young married couples, who need extra special assistance in house purchase.
What we have seen in recent days, with the £15 million assistance announced by the Government, will in a few months be a mere flash on the wave or a vague and distant memory. It is not of central importance to the main problem of overcoming the grave social disability in our society, whereby schemes of assistance for young married couples are not provided. I return, therefore, to the theme expressed by my hon. Friend the Member for Dartford (Mr. Trew) and, even more pointedly, my hon. Friend the Member for Billericay (Mr. McCrindle).
My right hon. Friend tells us that he has been discussing this question as a matter of urgency with the building societies. In my view, we have talked about it for too long, and action is overdue. We ought to bring in special schemes exclusively reserved for young married couples. I have no time to explain what I mean, but ideas of that kind will be familiar to many hon. Members.
I can make no more than one or two quick comments on possible special schemes for young married couples. Because the making of mortgages more readily available to everyone would have an inflationary effect, we must delimit schemes for young married couples by reference to age. I suggest that below the age of 27 would be a sensible line of approach, without producing an adverse inflationary impact.
In my view, the joint stock banks should do far more at the higher end of the income scale, through formal house-lending schemes, thus enabling building societies to make their funds available at the lower end.
Over the years, in my judgment, the building societies have pursued an absurdly conservative policy in regard to idle balances and liquid resources, and they should now be far less conservative in this respect. I make these suggestions—there are other ideas, also—within the context of special schemes for young married couples. I do not suggest that they should apply to all young married couples, but I want something done for

them at the lowest end of the income scale, and especially in London where help is needed most.
With those quick comments, I re-echo my hon. Friend's words on this most important aspect of the problem.

6.30 p.m.

Mr. William Molloy: Whenever we have these crisis debates— the longer we have the present Government, the more crisis debates we shall have—back benchers drive more and more nails into the philosophy of supply and demand and into the appalling idea of people having to stand on their own two feet. Paradoxically, the condemnation of those appalling notions comes principally from the party which is supposed to support them.
No one can say that we heard anything particularly inspiring from the Opposition Front Bench today, either. It is the system which has gone wrong. The system will not work. If people are expecting a Socialist answer from my party they are entitled to have one. We ought to say bluntly that the proof is plain, beyond reasonable doubt, that our present system of borrowing and lending for home ownership just does not work. Right hon. and hon. Members opposite should realise that we are in danger of elevating the status of moneylender above all decent principles.
The time has come to consider the establishment of a form of public works loan board which could devote itself to lending money to people who wish to engage in the laudable exercise of buying their own homes. Hon. Members on both sides of the House say that it is right and proper that people should be encouraged to buy their own homes. The present system has not provided the wherewithal, so let us examine my proposal and see whether we can not just make promises but provide the tools so that people may buy their own homes, under a system controlled by a democratically elected Parliament.

6.33 p.m.

Mr. Reginald Freeson: My view, contrary to that of the Secretary of State, is that the points made on both sides during the debate have been well worth hearing, whether we agree with all the detail or not. Hon.


Members on both sides have made excellent contributions.
I say at the outset, lest I should omit to do so later in my argument, that this Front Bench would support the proposal advanced by my hon. Friend the Member for Derby, South (Mr. Walter Johnson) that there should be a high-powered committee of inquiry established to review rapidly the whole subject of the provision of finance for house ownership, and for house building for other forms of tenure as well.
Over the past year or more there has been sufficient debate and argument in both political circles and professional circles to expose the main areas for study. It would be useful now if all the threads of thought which have developed in various quarters, including certain parts of the building society movement itself, were brought together and examined by such a high-powered committee of inquiry, and I urge the Government to take immediate steps in that direction.
In replying to the debate, I shall pass over much of the ground covered by hon. Members who have made detailed criticism of the Government's handling of the present situation during the past week or so. Those matters have been well covered in the debate as well as in all the public discussion by the mass media and elsewhere. Whatever view one takes of what has happened, I think it unquestionable that no sector of opinion on housing matters has commended what the Government have been doing in the last few days with regard to mortgage interest rates. I leave that aside, therefore, and turn to some of the basic matters underlying those events.
What makes a 9½ per cent. or 10 per cent. interest rate so critical at this time is not the interest rate itself, serious though that may be, but the fact that it comes on top of the sharpest rate of increase in land and house prices that we have ever experienced. Not only is the level the highest; the rate of increase has been the sharpest we have seen. Such a state of affairs has never been known before. Building society policy has certainly contributed, hence the interest in the idea of a stabilisation fund, but there is far more to the problem than that.
Property inflation and high interest rates are the products of Government

policy generally and of certain deep-seated contradictions in our housing finance system. I turn, first, to Government policy as a background to the events of recent days. Both the Government's taxation policy and their increase of the money supply have, apart from their other actions in the past 18 months or two years, released into the economy vast sums, the object being to create expansion. The Government believed that a free flow of money into the economy would produce results and lead to investment in productive industry.
In fact, that did not happen. Most of the money went into land and property speculation and similar forms of investment. It went into land and property on an unprecedented scale. By their general policy over the past two years, and by their actions as recently as a month ago in the Budget, the Government have shown that their policy was directed to creating a situation in which that would be the inevitable consequence.
Some of the basic anomalies in our system for financing home ownership have been discussed in the debate, and it is these anomalies which reveal where the most serious problem lies. The right hon. and learned Member for Gloucestershire, South (Sir F. Corfield) spoke of the "stop-go" situation in the building industry under successive Governments, as a result of using the industry as an economic barometer and as a means of financial management in the economy. I acknowledge that. From that kind of general policy stem most of the basic problems of the incapacity of the building industry and its inadequate recruitment, with economic inefficiency and the socially damaging results of recession in house building leading on to boom.
We must all learn from what has happened. At least towards the end of their term of office, the Labour Government had learned from it. A month or two before the election was called in 1970, as a junior Minister I prepared a memorandum for my senior Minister on this very question, and I know that I was not alone in directing attention to it. We had started to examine ways by which the supply of money to house buyers could be linked more closely to the supply of houses—and that is the key. It is in this area of housing finance that serious flaws in the system are most to be found.


From mid-1971 to the end of 1972 building societies were booming with the inflow of cash and they lent it freely without regard to the supply of houses. I believe that the ratio of lending was that for every mortgage advanced on a new house about three mortgages were advanced on existing houses, and at times the ratio was even higher than that.
This, in itself, added to inflation, in view of the rate of house building going on at the time and still continuing. Instead of taking the opportunity in such a boom period to examine some of the fundamentals of the situation, Ministers sat back complacently taking credit for something that had nothing to do with any of their actions. The area of housing policy directly within their responsibility —local authority building—experienced a continued rundown but the Ministers basked in the knowledge that the building society lending boom had stimulated confidence in the building industry and private sector starts were up.
They should have been spending that time in pursuing fundamental reforms that we will all have to face up to eventually. However, nothing was done by them. When the inevitable trough following the boom in cash flow came it created a famine. Builders are now losing confidence, as I can confirm from my contacts in the industry. In spite of the £15 million subsidy they are losing confidence. Inevitably, they will start to cut back, and that cut back will hit hardest those on lower incomes.
This is confirmed by the NEDO forecast to which my right hon. Friend the Member for Grimsby (Mr. Crosland) referred earlier. NEDO has indicated that it expects a fall back in the public sector starts between 1972 and 1975 from 123,000 to 110,000. In the private sector it expects it to drop to 210,000 from last year's rate of 227,000. The total of starts in the country, already at its lowest level for 10 years, is expected to drop from 350,000 in 1972–73 to 330,000 in 1975. That figure will be lower than the level achieved in 1963. It will not be a happy position to be in but it is the situation which is emerging now as a result of the Government sitting back for 2½ years just being satisfied that there was a massive cash flow going into the building societies, money which could be lent and which created confidence. The cash flow will

revive again but the houses will not be there in sufficient numbers for people to buy, and that will create a further spate of inflation. The situation will be worse if no action is taken now to end speculation and profiteering in the other areas of the property market.
The first lesson to be learned from the situation is that owner-occupation, housing to rent and land and property are indivisible as policy-making areas of the country's affairs. Policy must interrelate to each of them. That means we must cease the obsession with owner-occupation. We should talk of balanced housing policies and balanced housing programmes and stop assuming in everything we say and do that virtually all that must be done is to increase the rate of owner-occupation to solve almost all the housing problems. That is not true, and we should stop saying it, even if it is unpopular to do so. Credit control should be created—a policy which the Government virtually stopped about 18 months ago. The control should guide lending in certain key areas of the economy, and that should include housing and urban renewal. There should be drastic business rent control as part of the effort to control property and land speculation in our city areas.
My next suggestion may well draw laughs from Government benches, but I will mention it just the same. Land should be brought into public ownership in order to achieve sensible and balanced urban renewal and development at reasonable cost. That means that there must be price control relating to existing use value. There must be an end to speculation in residential property by extending the area of social ownership, especially municipal ownership, cooperatives or other forms of housing association—a positive expansion of this to put an end to private landlordism.
There must be an integrated policy on the balanced provision of houses of all kinds instead of an obsession with owner-occupation. If we continue to lose rented properties in our cities there will be a marked impact on the prices of owner-occupied houses for sale. Pressures will build up on that market which it cannot meet and prices will continue to rise. There should be some use of building society funds to meet the gravest need of all in housing, the need for more


non-profit dwellings to rent. There should be, financed with the help of building society funds as well as from other sources, an aggressive campaign for tenants to form co-operatives to buy their own properties where the owners of those properties are constantly buying and selling over the tenants' heads.
Linked with the proposed stabilisation fund, building societies should use their resources to invest directly in building, not simply to confine themselves, as has been the practice virtually since the 1874 Act, to lending money to people to buy houses. One of the merits in this, which was a point I was examining when I was still in the Ministry, is that at times of slump or trough in building when there is a lack of confidence in the industry, as happens from time to time, some of these resources could be used to stimulate building in order to maintain confidence and in order to create the kind of consistency referred to by two or three hon. Members.
I have certain ideas as to the kind of institution that should be created in order to achieve this. However, that must await another occasion, because time forbids an examination of it today. These are the kind of points we should be examining in a fundamental review of housing finance. They are the kind of points which I urge the Government to set up a committee of inquiry to consider. That is the view of the Opposition Front Bench. It is about time we had some consistency, some coherence and integrity integrated in national housing policy.

6.48 p.m.

The Minister for Housing and Construction (Mr. Paul Channon): I agree with the hon. Member for Willesden, East (Mr. Freeson) in one respect: we have had an excellent debate with interesting suggestions from both sides.
The Opposition motion has mixed both monetary and housing policy, but the House has shown today that the issues which have concerned it are essentially housing issues. The mortgage lending rate is of course one matter to be considered in this conext. However, as the hon. Member for Willesden, East and a number of other hon. Members have pointed out, it is only one question. Both

sides of the House are at least united in one aim. We are all concerned with providing decent homes for families, with enough houses for sale for those who want to own their home and enough houses to rent for those who prefer to rent or who cannot afford to buy.
I think it is common ground between us that most people want to own their home if they can. The only way in which we can make sure that their wishes will be fulfilled is to go on increasing the supply of houses for sale. Therefore, maintaining a high and stable output of houses to buy is an extremely high priority in housing policy. The whole Government are concerned about this and I am concerned about it as Minister for Housing and Construction. Two things are needed to achieve this objective. The first is an adequate supply of mortgage funds and the second is an adequate supply of land. The measures which my right hon. and learned Friend announced today will make a contribution on both of these vital matters.
The question of mortgage funds is the main part of the debate. Building societies have now raised their investment rates to a level which they believe will bring in the necessary money for the time being. In the longer term we look to some stabilisation arrangements which will ensure that enough mortgage funds are always available. This is a difficult and complicated matter which should not be over-simplified. We are determined to secure greater stability in the flow of mortgage funds, and discussions have begun on this with the Building Societies Association.
There is no point in dealing with the problem of money in isolation. We have also to deal with land. If there is no land, insufficient houses will be built and the prices of houses and land will go up. I was glad to have the support of my right hon. and learned Friend the Member for Gloucestershire, South (Sir F. Corfield) for the measures announced in the White Paper on land for housing. The land hoarding charge will help to flush out land with planning permission which is being hoarded for speculative purposes. The new planning guidelines represent a major shift of emphasis in the treatment of planning applications and appeals, because there


will now be a general presumption in favour of housing development.
We shall also tackle the problem of land being held back for development because of a lack of services, by introducing legislation at an early opportunity requiring developers to contribute to the cost of services provided by public authorities in connection with the development of land which has planning permission. I return to the question of money. The whole House, with the possible exception of the hon. Member for Ealing, North (Mr. Molloy). can agree that it is essential that there should be a sufficient flow of money into building societies to enable them to lend to those people who can reasonably expect to buy their own homes. Building societies' funds are the life blood of the private housing market, and a mortgage famine would be the worst possible result for everyone, whether or not he has a house of his own now. Builders will not build unless they think that people will buy the houses which they are engaged in building. There should be enough money flowing into building societies to keep up the housing programme which we all know is needed.
Building societies have to be able to attract funds in a competitive market for savings. In 1973 they will need at least the amount of money they lent in 1972 to support the level of house building of which the industry is capable.
Nearly half the money comes from repayments of earlier advances. But the societies still need not far short of £2,000 million this year as well, and at current interest rates they could not hope to get more than a fraction of this amount if they offered interest of only 5·6 per cent., the rate which corresponds to a mortgage rate of 8½ per cent. Therefore, the stabilisation fund that the right hon. Gentleman has set up retrospectively for us would have had to cream off enormous sums last year from the building society inflow. This raises serious and difficult problems that no one could be expected to solve in a short time.
In the controversy over mortgage rates, the major point must not be forgotten— to keep up the output of houses. Nothing must spoil that. My right hon. and learned Friend pointed out that last year there were 227,000 private housing starts

against 165,000 in 1970. The rate is at least being maintained so far this year. [Interruption.] The trend is at present upwards.
In discussing stabilisation with the building societies, we will have particularly in mind the position of the younger and less well-off first-time purchasers.
I want to return to the more limited question that is concerning the House, whether the Government were right in the very special circumstances existing now to provide the £15 million bridging grant that we have been discussing. The building societies were convinced, rightly or wrongly, that it was essential for them to go to 6·75 per cent. as their investment rate. There may be grounds for dispute about that, but it was their view that they had to do so. The 6·75 per cent. investment rate is worth, to the investor paying the standard rate of tax, 9·64 per cent. That inevitably means a mortgage rate of 10 per cent. unless action is taken.
The Government came to the conclusion that in the context of the counter-inflation policy it would have been wrong to allow mortgage interest rates to rise to 10 per cent. That would have meant that the cost to a new home buyer of his mortgage would have been increased by a further 13 per cent. gross. It seemed right to the Government that steps should be taken to try to modify that increase, and accordingly they took action. My right hon. and learned Friend the Secretary of State has made it clear that there will be a corresponding cut in expenditure to compensate for that amount. Therefore, there will be no net addition to public expenditure, nor will there be any net addition to the borrowing requirement. I hope that my hon. Friends will accept that that is so.
One or two hon. Members suggested that it is unfair that home owners should have been assisted in this way by the Government. I understand that to be the view of some Opposition Members. Certainly it was clear from their speeches. But surely that cannot be right. As part of our counter-inflation policies, householders of every type have received some help. [Interruption.] I am coming to council tenants. The national increase in the needs allowance cost £30 million. That will benefit council tenants and
 


private tenants, including tenants of furnished accommodation to whom the national scheme is being extended this month.
We have also shown our concern about the position of all householders— owner-occupiers and tenants alike—as ratepayers. We are making available the highest ever Exchequer grants to local authorities. We have now introduced a further £10 million of additional domestic relief to assist those ratepayers who are worst affected by revaluation.
Thus it is entirely right that we should also be giving some modest help to owner-occupiers with a mortgage, including young couples buying their home for the first time, to avoid their having to meet an exceptionally high rate of interest at an exceptional period.
In 1972 there were 371,000 building society mortgages to first-time purchasers, an increase of 70,000 on 1970. There were 144,000 mortgages to borrowers under 25, an increase of 27,000. Perhaps most important of all in the context of this debate, there were 192,000 mortgages to borrowers with incomes up to the average industrial manual worker's earnings, compared with 158,000 in 1970. In the face of those facts—

Miss Mary Holt: Does my hon. Friend realise that there are forms of lending on mortgage other than building society mortgages? How does he attempt to cope with those?

Mr. Channon: In the brief time that I have, I shall try to come to my hon. Friend's point.
In the face of the facts I have given about average industrial earnings, is it so wrong that additional assistance should be given in the context of the fight against inflation to help these people? The building societies have assured the Government that they intend to cut back mortgages over £13,000 for housing and to intensify their help for first-time purchasers.
The effect of the bridging grant should be in the short term to moderate increases in new gross mortgage costs from about 13 per cent. to 8 per cent. A typical mortgage, would increase by about £4 gross or £3 net at present. If

the rate had been allowed to rise to 10 per cent. the increased cost would have been £6 gross or £4 net, so there is a gross saving of £2 per month on a fairly typical mortgage.
In the context of counter-inflation, that is right. [Interruption.] Some Labour hon. Members are saying that it is wrong in principle that the subsidy should be granted, while some say that it is inadequate. They must decide which is their case. The Leader of the Opposition has himself suggested such subsidies. Surely Labour hon. Members cannot disagree with that wise advice? [Interruption.] I am glad to learn that they agree that we should have a policy of subsidising mortgages under present conditions. That is what the Leader of the Opposition has said. Even the hon. Member for Heywood and Royton (Mr. Joel Barnett), although he disagrees with the TUC occasionally, can scarcely disagree with the Leader of the Opposition. I understand that to be the Opposition's position. The right hon. Member for Grimsby perhaps did not answer that question, and we must look at exactly what the Opposition are saying.
The Opposition cannot ride both horses at the same time. They can either say that it is inequitable to have the subsidy or that the subsidy is insufficient. [Interruption.] If they say that it is inequitable, the right hon. Member for Jarrow (Mr. Fernyhough) had better deal with his right hon. Friend the Leader of the Opposition on that matter. The Leader of the Opposition is trying to ride both horses. He is trying to say that the help is insufficient.
I should be more concerned about the motion if it were not that history shows just how hollow are the Opposition's words. [Laughter.] Before Opposition Members laugh too hard, let them remember their own record. When in office they allowed two mortgage famines in 1965 and 1969. There is no mortgage famine now, and my right hon. Friends have taken steps to avert one.
The Labour Party when in power sought to deal with the land problem by the Land Commission and betterment levy. My right hon. Friends are doing it the sensible way, through getting more land released through the planning system. [Laughter.] That seems to be a


matter of amusement to the Opposition. Instead of having a tax on land transactions, which added to the price but not to the supply, we shall tax land hoarding and make developers pay for the cost of services. The Opposition argue for a municipal monopoly. My right hon. Friends want choice and more voluntary effort in housing.
Labour Members studied the problem of housing finance for 4½ years without coming to conclusions, except for the interminable memoranda that the hon. Member for Willesden, East wrote to successive Ministers of Housing. My right hon. Friends solved the problem by applying to council tenants the fair rents system invented by the Labour Party but

with a proper, comprehensive rebate scheme. We have given subsidies where they are needed, to the people most in need in that sector.

Today has seen the publication of a progressive new White Paper dealing with the next steps in housing, with the problem of the increase in building land that is so essential, with the long-term problem of adequate finance for the housing movement.

In the light of this, the Opposition's motion is ill-timed, ill-considered, and inappropriate. I ask my right hon. and hon. Friends to reject it.

Question put:—

The House divided: Ayes 261 Noes 283.

Division No. 99.]
AYES
[7.0 p.m.


Abse, Leo
Davis, Terry (Bromagrove)
Houghton, Rt. Hn. Douglas


Allaun, Frank (Salford, E.)
Deakins, Eric
Howell, Denis (Small Heath)


Archer, Peter (Rowley Regis)
de Freitas, Rt. Hn. Sir Geoffrey
Huckfield, Leslie


Armstrong, Ernest
Delargy, Hugh
Hughes, Mark (Durham)


Ashley, Jack
Dell, Rt. Hn. Edmund
Hughes, Robert (Aberdeen, N.)


Ashton, Joe
Dempsey, James
Hughes, Roy (Newport)


Atkinson, Norman
Doig, Peter
Hunter, Adam


Bagier, Gordon A. T.
Dormand, J. D.
Irvine, Rt. Hn. Sir Arthur (Edge Hill)


Barnes, Michael
Douglas, Dick (Stirlingshire, E.)
Janner, Greville


Barnett, Guy (Greenwich)
Douglas-Mann, Bruce
Jay, Rt. Hn. Douglas


Barnett, Joel (Heywood and Royton)
Driberg, Tom
Jenkins, Hugh (Putney)


Beaney, Alan
Duffy, A. E. P.
Jenkins, Rt. Hn. Roy (Stechford)


Benn, Rt. Hn. Anthony Wedgwood
Dunn, James A.
John, Brynmor


Bennett, James (Glasgow, Bridgeton)
Dunnett, Jack
Johnson, Carol (Lewisham, S.)


Bidwell Sydney
EadieAlex
Johnson, James (K'ston-on-Hull, W.)




Johnson, Walter (Derby, s)


Bishop, E.S.
Edelman, Maurice
Johnston, Russell (Inverness)


Blenkinsop, Arthur
Edwards, Robert (Bilston)



Boardman, H. (Leigh)
Edwards, William (Merioneth)
Jones, Barry (Flint, E.)


Booth, Albert
Ellis, Tom
Jones, Dan (Burnely)


Bottomley, Rt. Hn. Arthur
English Michael
Jones T. Alec (Rhondda, W.)


Boyden, James (Bishop Auckland)
Evans, Fred
Judd Frank


Bradley, Tom
Ewing, Harry
Kaufman, Gerald


Broughton, Sir Alfred
Faulds, Andrew
Kelley, Richard


Brown, Robert C. (N'c'tle-u-Tyne, W.)
Fernyhough, Rt. Hn. E.
Kerr, Russell


Brown, Hugh D. (G'gow, Provan)
Fitch, Alan (Wigan)
Kinnock, Neil


Brown, Ronald (Shoreditch &amp; F'bury)
Fletcher, Ted (Darlington)
Lambie, David


Buchan, Norman
Ford, Ben
Lamborn, Harry


Buchanan, Richard (G'gow, Sp'burn)
Forrester, John
Lamond, James


Butler, Mrs. Joyce (Wood Green)
Fraser, John (Norwood)
Latham, Arthur


Callaghan, Rt. Hn. James
Freeson, Reginald
Lawson, George



Galpern, Sir Myer
Leadbitter, Ted


Cant, R. B.
Garrett, W.E.



Carmichael, Neil
Gilbert, Dr. John
Lee, Rt. Hn. Frederick


Carter, Ray (Birmingh'm, Northfield)
Ginsburg, David (Dewsbury)
Leonard, Dick


Castle, Rt. Hn. Barbara
Golding, John
Lestor, Miss Joan


Clark, David (Colne Valley)
Golding, John
Lewis, Arthur (W. Ham, N.)


Cocks, Michael (Bristol, S.)
Grant, George (Morpeth)
Lewis, Ron (Carlisle)


Cohen, Stanley
Grant, John D. (Islington, E.)
Lipton, Marcus



Griffiths, Eddie (Brightside)
Lomas, Kenneth


Concannon, J. D.




Conlan, Bernard
Griffithas, will (Exchange)
Lyon, Afexander W. (York)


Corbet, Mrs. Freda
Grimond Rt. Hn. J
Lyons, Edward (Bradford, E.)


Cox, Thomas (Wandsworth, C.)
Hamilton, James (Bothwell)
Mabon, Dr. J. Dicckson


Crawshaw Richard
Hamilton William (Fife, W.)
McBride, Neil


Cronin John
Hamling, William
McCartney, Hugh


Crosland, Rt. Hn. Anthony
Hannan, William (G'gow, Maryhill)
 McElhone, Frank


Crossman, Rt. Hn. Richard
Hardy, Peter
McGuire, Michael


Cunningham, G. (Islington, S.W.)
Harrison, Walter (Wakefield)
Machin, George


Cunningham, Dr. J. A. (Whitehaven)
Hart, Rt. Hn. Judith
Mackenzie, Gregor


Dalyell, Tam
Hattersley, Roy
Mackie, John


Davidson, Arthur
Healey, Rt. Hn. Denis
Mackintosh, John P.


Davies, Denzil (Llanelly)
Heffer, Eric S.
McMillan, Tom (Glasgow, C.)


Davies, G. Elfed (Rhondda, E.)
Hilton, W. S.
McNamara, J. Kevin


Davies, Ifor (Gower)
Hooson, Emlyn
Mallalieu, J. p. W. (Huddersfield, E.)


Davis, Clinton (Hackney, C.)
Horam, John
Marks, Kenneth




Marsden, F.
Peart, Rt. Hn. Fred
Strauss, Rt. Hn. G. R.


Mason, Rt. Hn. Roy
Pendry, Tom
Summerskill, Hn. Dr. Shirley


Mayhew, Christopher
Perry, Ernest G.
Taverne, Dick


Meacher, Michael
Prescott, John
Thomas,Rt.Hn.George (Cardiff,W.)


Mellish, Rt. Hn. Robert
Price, William (Rugby)
Thomas, Jeffrey (Abertillery)


Mendelson, John
Probert, Arthur
Thorpe, Rt. Hn. Jeremy


Mikardo, Ian
Radice, Giles
Tinn, James


Millan, Bruce
Reed, D. (Sedgefield)
Tope, Graham


Miller, Dr. M. S.
Rees, Merlyn (Leeds, S.)
Torney, Tom


Milne, Edward
Rhodes, Geoffrey
Tuck, Raphael


Mitchell, R. C. (S'hampton, Itchen)
Richard, Ivor
Urwin, T. W.


Molloy, William
Roberts, Albert (Normanton)
Varley, Eric G


Morris, Alfred (Wythenshawe)
Roberts, Rt.Hn.Goronwy(Caernarvon)
Wainwright, Edwin


Morris, Charles R. (Openshaw)
Robertson, John (Paisley)
Walden, Brian (B' m' ham, All Saints)


Morris, Rt. Hn. John (Aberavon)
Roderick, Caerwyn E.(Brc'n&amp;R'dnor)
Walker, Harold (Doncaster)


Moyle, Roland
Rodgers, William (Stockton-on-Tees)
Wallace, George


Mulley, Rt. Hn. Frederick
Rowlands, Ted
Watkins, David


Murray, Ronald King
Sandelson, Neville
Weitzman, David


Oakes, Gordon
Sheldon, Robert (Ashton-under-Lyne) 
Wellbeloved, James


Ogden, Eric
Shore, Rt. Hn. Peter (Stepney)
Wells, William (Walsall, N.)


O'Halloran, Michael
Short,Rt.Hn.Edward (N'c'tle-u-Tyne) 
White, James (Glasgow, Pollok)


O'Malley, Brian
Short, Mrs. Renée (W'hampton.N.E.)
Whitehead, Phillip


Oram, Ber
Silkin, Rt. Hn. John (Deptford)
Whitlock, William


Orbach, Maurice
Silkin, Hn. S. C. (Dulwich)
Willey, Rt. Hn. Frederick


Orme, Stanley
Sillars, James
Williams, Alan (Swansea, W.)


Oswald, Thomas
Silverman, Julius
Williams, W. T. (Warrington)


Owen, Dr. David (Plymouth, Sutton)
Skinner, Dennis
Wilson, Alexander (Hamilton)


Padley, Walter
Smith, John (Lanarkshire, N.)
Wilson, Rt. Hn. Harold (Huyton)


Paget, R. T.
Spearing, Nigel
Wilson, William (Coventry, S.)


Palmer, Arthur.
Spriggs, Leslie
Woof, Robert


Pannell, Rt. Hn. Charles
Stallard, A. W.



Pardoe, John
Stewart, Rt. Hn. Michael (Fulham)
TELLERS FOR THE AYES:


Parker, John (Dagenham)
Stoddart, David (Swindon)
Mr. Donald Coleman and


Parry, Robert (Liverpool, Exchange)
Stonehouse, Rt. Hn. John
Mr. Joseph Harper.


Pavitt, Laurie
Strang, Gavin





NOES


Adley, Robert
Clarke, Kenneth (Rushcliffe)
Grant, Anthony (Harrow, C.)


Alison, Michael (Barkston Ash)
Cockeram, Eric
Gray, Hamish


Allason, James (Hemel Hempstead)
Cooke, Robert
Green, Alan


Archer, Jeffrey (Louth)
Coombs, Derek
Grieve, Percy


Astor, John
Cooper, A. E.
Griffiths, Eldon (Bury St. Edmunds)


Atkins, Humphrey
Cordle, John
Grylls, Michael


Awdry, Daniel
Corfield, Rt. Hn. Sir Frederick
Gummer, J. Selwyn


Baker, Kenneth (St. Marylebone)
Cormack, Patrick
Gurden, Harold


Baker W. H. K. (Banff)
Costain, A. P.
Hall, Miss Joan (Keighley)


Balniel, Rt. Hn. Lord
Crowder, F. P.
Hall, John (Wycombe)


Barber, Rt. Hn. Anthony
d'Avigdor-Goldsmid, Sir Henry
Hall-Davis, A. G. F.


Batsford Brian
d'Avigdor-Goldsmid, Maj.-Gen.Jack
Hamilton, Michael (Salisbury)


Beamish, Col. Sir Tufton
Dean, Paul
Hannam, John (Exeter)


Bell, Ronald
Deedes, Rt. Hn. W.F.
Harrison, Brian (Maldon)


Bennett, Dr. Reginald (Gosport)
Digby, Simon Wingfield
Harrison, Col. Sor Harwood (Eye)


Benyon, W.
Dixon, Piers
Haselhurst, Alan


Berry, Hn. Anthony
Douglas-Home, Rt. Hn. Sir Alec
Hastings, Stephen




Havers, Micheal


Biffen, John
Drayson, G. B.
Hawkins, Paul


Blaker, Peter
du Cann, Rt Hn. Edward
Hayhoe, Barney


Boardman, Tom (Leicester, S.W.)
Dykes Hugh
Heath, Rt. Hn. Edward


Body, Richard
Eden, Rt. Hn. Sir John
Heseltine, Michael


Boscawen, Hn. Robert
Elliot, Capt.Walter (Carshalton)
Hicks,, Robert


Bossom, Sir Clive
Elliott, R. w. (N'ctle-upon-Tyne,N.)
Higgins, Terence L.


Bowden, Andrew
Emery, Peter
Hiley, Joseph


Bray Ronald
Eyre, Reginald
Hill, John E. B. (Norfolk, S.)


Brewis John
Farr, John
Holland, Philip


Brinton, Sir Tatton
Fell, Anthony
Horden, Peter


Brocklebank-Fowler Christopher
Fenner, Mrs. Peggy
Hornby, Richard



Fidler, Micheal
Howe, Hn. Sir Geofferey(Reigate)


Brown, Sir Edward (Bath)
Fisher, Nigel (Surbiton)
Howell, Ralph (Norfolk, N.)


Bruce-Gardyne, J.
Fletcher-Cooke, Charles
Hunt, John


Bryan, sir Paul
Fookes, Miss Janet
Iremonger, T. L.


Buchanan-Smith,Allck(Angus,N &amp; M)
Fortescue, Tim
Irvine, Bryant Godman (Rye)


Buck, Antony
Foster, Sir John
James, David


Bullus, Sir Eric
Fowler, Norman
Jessel, Toby


Burden, F. A.
Fox, Marcus
Johnson Smith, G. (E. Grinstead)


Butler, Adam (Bosworth)
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)
Jones, Arthur (Northants, S.)


Campbell, Rt. Hn. G. (Moray &amp; Nairn)
Fry, Peter
Jopling, Michael


Carlisle, Mark
Gardner, Edward
Joseph, Rt. Hn. Sir Keith


Carr, Rt. Hn. Robert
Gibson-Watt, David
Kaberry, Sir Donald


Cary, Sir Robert
Gilmour, Ian (Norfolk, C.)
Kellett-Bowman, Mrs. Elaine


Channon, Paul
Glyn, Dr. Alan
Kershaw, Anthony


Chapman, Sydney
Goodhart, Philip
Kimball, Marcus


Chichester-Clark, R.
Goodhew, Victor
King, Evelyn (Dorset, S.)


Churchill, W. S.
Gorst, John
King, Tom (Bridgwater)


Clark, William (Surrey, E.)
Gower, Raymond
Kinsey. J. R.







Kirk, Peter
Noble, Rt. Hn. Michael
Sproat, lain


Kitson, Timothy
Normanton, Tom
Stainton, Keith


Knight, Mrs. Jill
Nott, John
Stanbrook, Ivor


Knox, David
Onslow, Cranley
Stewart-Smith, Geoffrey (Belper)


Lambton, Lord
Oppenheim, Mrs. Sally
Stodart, Anthony (Edinburgh, W.)


Lamont, Norman
Owen, ldris (Stockport, N.)
Stoddart-Scott, Col. Sir M.


Lane, David
Page, Rt. Hn. Graham (Crosby)
Stokes, John


Langford-Holt, Sir John
Page, John (Harrow, W.)
Stuttaford, Dr. Tom


Le Merchant, Spencer
Parkinson, Cecil
Sutcliffe, John


Lewis, Kenneth (Rutland)
Peel, John
Tapsell, Peter


Lloyd, lan (P'tsm'th, Langstone)
Percival, lan
Taylor, Sir Charles (Eastbourne)


Loveridge, John
Peyton, Rt. Hn. John
Taylor, Edward M.(G'gow,Cathcart)


Luce, R. N.
Pike, Miss Mervyn
Taylor, Frank (Moss side)


McAdden, Sir Stephen
Pink, R. Bonner
Taylor, Robert (Croydon, N.W.)


MacArthur, lan
Pounder, Rafton
Tebbit, Norman


McCrindle, R. A.
Powell, Rt. Hn. J. Enoch
Temple, John M.


McLaren, Martin
Price, David (Eastleigh)
Thatcher, Rt. Hn. Mrs. Margaret


Maclean, Sir Fitzroy
Prior, Rt. Hn. J. M. L.
Thomas, John Stradling (Monmouth)


McMaster, Stanley
Pym, Rt. Hn. Francis
Thomas, Rt. Hn. Peter (Hendon, S.)


Macmillan, Rt.Hn.Maurice(Farnham)
Quennell, Miss J. M.
Thompson, Sir Richard (Croydon, S.)


McNair-Wilson, Michael
Raison, Timothy
Tilney, John


McNair-Wilson, Patrick (New Forest)
Ramsden, Rt. Hn. James
Trafford, Dr. Anthony


Maddan, Martin
Rawlinson, Rt. Hn. Sir Peter
Trew, Peter


Madel, David
Redmond, Robert
Turton, Rt. Hn. Sir Robin


Marples, Rt. Hn. Ernest
Reed, Laurance (Bolton, E.)
van Straubenzee, W. R.


Marten, Neil
Rees, Peter (Dover)
Vaughan, Dr. Gerard


Mather, Carol
Rees-Davies, W. R.
Vickers, Dame Joan


Maude, Angus
Renton, Rt. Hn. Sir David
Waddington, David


Maudling, Rt. Hn. Reginald
Rhys Williams, Sir Brandon
Walder, David (Clitheroe)


Mawby, Ray
Ridley, Hn. Nicholas
Walker, Rt. Hn. Peter (Worcester)


Maxwell-Hyslop, R. J.
Ridsdale, Julian
Walker-Smith, Rt. Hn. Sir Derek


Meyer, Sir Anthony
Rippon, Rt. Hn. Geoffrey
Walters, Dennis


Mills, Peter (Torrington)
Roberts, Michael (Cardiff, N.)
Ward, Dame lrene


Miscampbell, Norman
Roberts, Wyn (Conway)
Wells, John (Maidstone)


Mitchell, Lt.-Col.C.(Aberdeenshire,W)
Rossi, Hugh (Hornsey)
White, Roger (Gravesend)


Mitchell, David (Basingstoke)
Rost, Peter
Wiggin, Jerry


Moate, Roger
Royle, Anthony
Wilkinson, John


Money, Ernie
Russell, Sir Ronald
Winterton, Nicholas


Monks, Mrs. Connie
St. John-Stevas, Norman
Wolrige-Gordon, Patrick


Monro, Hector
Scott, Nicholas
Wood, Rt. Hn. Richard


Montgomery, Fergus
Shaw, Michael (Sc'b'gh &amp; Whitby)
Woodhouse, Hn. Christopher


More, Jasper
Shelton, William (Clapham)
Woodnutt, Mark


Morgan, Geraint (Denbigh)
Shersby, Michael
Worsley, Marcus


Morgan-Giles, Rear-Adm.
Simeons, Charles
Wylie, Rt. Hn. N. R.


Morrison, Charles
Sinclair, Sir George
Younger, Hn. George


Mudd, David
Skeet, T. H. H.



Murton, Oscar
Smith, Dudley (W'wick &amp; L'mington)
TELLERS FOR THE NOES:


Nabarro, Sir Gerald
Soref, Harold
Mr. Walter Clegg and


Neave, Airey
Speed, Keith
Mr. Bernard Weatherill.


Nicholls, Sir Harmar
Spence, John

Question accordingly negatived.

Orders of the Day — CHRONICALLY SICK AND DISABLED PERSONS

7.15 p.m.

Mr. Jack Ashley: I beg to move,
That this House deplores the long delay in ensuring full implementation of the Chronically Sick and Disabled Persons Act 1970, Her Majesty's Government's failure to arrange a parliamentary debate on Reports presented to the House under the Act, and the continuing lack of provision for the chronically sick and disabled.
We have dragged a reluctant Government to this debate for three reasons: first, because they have failed to ensure the full implementation of the Chronically Sick and Disabled Persons Act; secondly, because they have failed to ensure the full employment of disabled people; thirdly, because they have failed to provide a disablement income for all disabled people, particularly for disabled housewives.
The Chronically Sick and Disabled Persons Act is a major instrument of social change. It was piloted through the House of Commons by my hon. Friend the Member for Manchester, Wythen-shawe (Mr. Alfred Morris). It is as a result of his dedication and great skill that the Act now stands as a great monument—an Act to which all disabled people in Britain now look. They have looked to the Government for the past two-and-a-half years to implement the Act, and it has been a very patchy implementation. I recognise that much has been achieved by the Act, but its potential has by no means been fulfilled and the hopes of thousands of disabled people are now being frustrated by the failure of local authorities and the Government to ensure full implementation.
I am not referring to slightly disabled people, for those covered by the Act are profoundly disabled. Many of them are unable to walk, at least, not without great difficulty; some are chair-bound; some are bound to their beds; some need assistance all the time. These are people in great need of all the facilities that can be offered by the Act.
How far have the proud aspirations of the sponsors of the Act been fulfilled? We have all seen the report by Miss Pat Healy in The Times today on the report of the Central Council for the Dis-

abled—and splendid reports both are. I am delighted with the massive increase in the provision of total expenditure by some local authorities. It is important— and the Secretary of State will be anxious that I should do this—to pay tribute to those local authorities that have increased their local expenditure, and I do so gladly, because the perspective of the debate is important.
It does not seem very long since I was criticising Coventry. However, in the last financial year Coventry increased its expenditure on the disabled 11-fold. That is a magnificent achievement, and Coventry should be warmly congratulated. Salford increased its expenditure sevenfold. Seven local authorities have trebled their expenditure, and 274 local authorities have doubled their expenditure. We should pay tribute to those local authorities.
However, study of the report of the Central Council for the Disabled reveals that 19 local authorities spent less than in the previous year. If that allegation is borne out, it is shocking that any local authority should reduce its expenditure at a time when the Government have increased the rate support grant. It is inexcusable at a time when other local authorities are increasing their expenditure. It is shocking and inexcusable that disabled people are deprived of vital services and that the services which are provided vary according to where they live.
The directors of social services have today challenged the figures of the central council. They say that some of the figures are inaccurate. I know that my right hon. and hon. Friends, and Conservative Members, would wish to chal. lenge those allegations of inaccuracy. All hon. Members recognise that given the reorganisation of local government there must inevitably be some changes in the compilation of accounts. I recognise that. The Institute of Municipal Treasurers and Accountants today issued a statement in which it said:
… incorrect conclusions can result from unqualified comparisons drawn from these two publications.
No one is making unqualified comparisons between the two reports. If the figures are wrong, the directors of social services and hon. Members should not blame the Central Council for the Disabled. The treasurers should be blamed,


because the information given to the institute is supplied by the treasurers. If there are any inaccuracies in the report, let the borough councils and the city councils accept responsibility. If the figures are not strictly comparable, why should they be published? Let us suppose that the central council had not issued its report. Would the Government have drawn attention to the difficulty of comparing like with unlike, or would the great British public have been misled if, in fact, the figures are misleading?
If the county councils and the borough councils are giving information which is of dubious validity, they cannot blame the central council. I am prepared to accept that there may be some minor discrepancies in the figures, but that in no way invalidates the main conclusions of the report, which are that some local authorities have not done as well as others.
It is that lack of uniformity of progress that is at the heart of the criticism of local authorities. Coventry has increased its expenditure on the disabled 11-fold and Salford has made a sevenfold increase. If we accept minor differences, the fact is that those local authorities have not increased their total expenditure to anything like the level of the best local authorities. That is a cause for deep concern.
If there is confusion, the people who are responsible are not only the treasurers, who gave the information, but the Government. The Government have been asked by the Opposition to present information on expenditure, on the number of people who are registered and on the number who are disabled. The Government have consistently refused to give that information. I recognise that directors of social services are civil servants and that they are seeking to protect their political masters. Some of my best friends are civil servants. It is important to realise that civil servants, in their allegations against the central council, have been making some outrageous comments, which, if interpreted carefully, do not reflect very well on the directors or on the city councillors and aldermen who decide these issues. It was said by one director that the figures can give a false impression. That director then said that a social centre for

the disabled had been lost to a road works scheme. I can imagine that director telling the disabled, "I am sorry that there are no wheelchairs, no meals-on-wheels and no bedpans, but we have a marvellous bypass for the busy motorists." If directors of social services acknowledge that some of the money voted to go to the disabled is going to build bypasses or sewers, it is admirable that they should be honest and describe the information in public.
The House should be under no illusion that there are some discrepancies in the accounts given by the various directors of social services. I regret to say that one director said:
I assume that there has been much less demand by the disabled in my area.
What a marvellous statement. The House is trying to help disabled people. The all-party group meets practically every week and uncovers a vast reservoir of human suffering. Disabled people are found whom we did not know about, yet that director says that there has been much less demand by disabled people. It is incredible that people can say that kind of thing. Some directors have said that they are not bothered by the central council's figures. However, in the area of the director who assumed that there was much less demand I would guess that the disabled persons who are receiving the services are bothered.
If we choose to disregard the central council's report, there is a very important report issued by the National Fund for Research into Crippling Diseases. That report was issued to give information about the implementation of the Alf Morris Act. The House will know that the chairman of that fund is one of our most distinguished military generals-Field Marshal Lord Harding—and the director is Duncan Guthrie. Those two men have made a massive contribution to the welfare of all our disabled people.
The noble Lord and Mr. Guthrie have been diplomatic—I find that unusual for a soldier—and have said that their report should not be interpreted as a criticism of local authorities. Those of us who are under no such constraint will be able to disregard that aspect of their report. Their findings are a formidable indictment of the way in which local authorities are implementing the Alf Morris Act.
According to the report of the national fund, no less than one-third of the local authorities are not estimating, or are not properly estimating, the number of disabled people in their areas. They are not only fitting themselves with self-imposed blinkers, but they are breaking the law because, as my hon. Friend the Member for Manchester, Wythenshawe knows, it is clearly stated in the Chronically Sick and Disabled Persons Act that it is the duty of local authorities to discover the numbers of disabled people in their areas.
The Government should say that they propose to insist that the law must be observed, because there is no point in their being tough with trade unionists and not with councils which are breaking the law. Not all the figures have yet been published. The Government should publish the detailed figures this year, not next year.
The Government are also being coy about the number of people who are registered. The Secretary of State for Social Services and I have had a long dispute about the register and I do not propose to elaborate on it. I merely say that the survey by the national fund shows that the number of people on the register has increased from 200,000 only to 305,000. Yet the Government's own survey estimated that there were 1,129,000 severely and appreciably disabled persons. That means that after nearly three years of office of the present Government, apparently implementing the Act, or helping local authorities to implement it, 800,000 disabled people are still not registered by local authorities. What a marvellous record by the Government!
These variations in the number of disabled people registered by local authorities are deplorable. The highest figure of registration is 25 per thousand, whereas the lowest is only nine per thousand. The indolence and indifference of some local authorities has been encouraged by the Government because their circulars went out of their way to let the local authorities know that full registration was not a legal requirement of the Act.
It is also important to note that these variations among local authorities are not confined to Section 1 of the Act. They relate to all sections of the Act. For example, some local authorities

devote to the provision of home helps only one-quarter of the amount devoted by others; some devote to transport only one-sixth of what is devoted by others; in adaptations to houses, some devote only one-twelfth of what is devoted by others; for telephones—the lifeline of disabled persons—some devote only one-twenty-fifth of what is devoted by the best local authorities.
We see some directors of social services, backed by niggardly, backward and indolent councils, saying that telephones are not really necessary or vital for the disabled, and recommending flashing lights or sirens, or even, in some cases, whistles. Imagine a meeting of severely disabled people being told, with the director of social services saying, "If you are in trouble do not call for the ambulance or your doctor—just turn your house into a lighthouse or a police car and hope that some passer-by will either see or hear you and come in and help. If no one does, that is bad luck on you." That kind of thing is not good enough. It is outrageous that the Government are permitting this shocking variation in provision for the disabled.
The Government do not allow such disparity in educational provisions. The Government are rightly quick to step in and insist that the educational standards of a bad education authority should be raised to the level applied all over the country. If the Government are not prepared to allow bad educational standards they should not allow bad standards for disabled people in different areas. The Government are applying a double standard to two sets of service, and that is quite wrong. Their record is nothing to boast about.
Apart from a couple of silly circulars they have sent to local authorities, the Government's excuse for inaction is that they do not wish to dictate to local authorities. They say that they respect local autonomy. We should bear that phrase in mind. I ask the House to remember that it was the Opposition who were trying to defend local autonomy when the Government were bulldozing the Housing Finance Act through the House. We then asked the Government to remember local autonomy if some councils tried to protect their tenants from rent increases, but the Government did not respect local autonomy.


They said "We will send in a commissioner"—really, a commissar—"to take over the functions of a local authority which will not carry out its responsibilities."
That, in fact, is what is being done under the Housing Finance Act, and it is entirely wrong to apply that standard to local authorities not prepared to implement an Act to increase rents of council tenants while at the same time refusing to take similar action against local authorities which are not prepared to fight on behalf of disabled people.
I believe that the Government should establish an inspectorate on the same lines as the inspectorate in the education service so as ensure standardisation of the provisions for the disabled, and that they should back it up by establishing commissioners on the lines of the commissioners under the Housing Finance Act in order to implement the inspectorate's findings. I speak for the Opposition when I say that if the Government bring forward that kind of legislation, we will support it if it is designed to ensure that the backward local authorities ignoring the disabled are brought into line.
The Government should also accept some responsibility for publicising the Chronically Sick and Disabled Persons Act because it is important to recognise that some local authorities are reluctant to publicise it themselves because it would involve a burden on the rates. But by saving ratepayers' cash by savings on domiciliary services, they are adding a burden on the taxpayers by institutionalising disabled people.
I have spoken long enough, and I see that I have got through only half my speech. I will therefore draw to a conclusion. The Government are continually talking about having increased the rate support grant for the disabled, and I would like the Secretary of State to answer some questions.
First, is the right hon. and learned Gentleman sure that all the money so allocated for the disabled is being used for the disabled by local authorities? If he is not sure, what checks are being made by the Government to ensure that it is? Secondly, what action does the right hon. and learned Gentleman propose to take to find out whether local authorities are building bypasses rather than allocat-

ing money for adaptations for wheel chairs and other services for the disabled? Thirdly, will he demand a full account of all the cash spent since the Government's welcome announcement about the increase in the rate support grant for disabled people? Fourthly, will he ensure that where a local authority is found guilty of what I would call in this context misappropriation of funds, the money is reclaimed and re-channelled back to provision for disabled people? Finally, will he recommend to the Treasury or to the appropriate Department changes in the rate support grunt system if that is necessary or desirable in order to achieve these ends?
I believe that the time is long overdue for a decisive change in Government policy towards the disabled. What we need is a really tough policy towards those local authorities which are failing to implement the Alf Morris Act and far greater encouragement to those local authorities which are implementing it.
The Government should give the disabled a higher priority in future. They should make far more financial provision than that already announced by the Secretary of State. They should whisk the disabled from the back of the queue to the front. Only if they do that can we begin to say that we are treating our disabled people properly. The Government should not only expand the services but should give disabled people a disablement income as advocated by the Disablement Income Group, and they should cater especially for the disabled housewife.
They should end the scandal of 1,500,000 disabled housewives who are denied all disablement income. This is a monumental example of sex discrimination against women who are less able to defend their rights. I recognise that there is an official fallacy that women at home do not work. That is an insult to women, but it is an official fallacy. It is time the Government reconsidered this long-standing grievance, because it follows from that that the incapacity of women to work requires no compensation. That is deplorable. The devastation to family life caused by disablement makes a mockery of that argument. I ask the Government to remember that 488,000 housewives are so severely disabled as to be unable to do any housework at all.


The burden on their families must be appalling.
The Government should also ensure, since they have not done so in the past, that there is a commitment to the full employment of disabled people. I will not labour that point now, because I have raised it on innumerable occasions. The Government should make sure that the half of Britain's employers who are failing to fulfil their responsibilities under the quota scheme are made to fulfil them. They should make the present system work, and if they cannot they should find another system. This is my suggestion. They can make employers pay for their 3 per cent. quota irrespective of whether they employ disabled people. Employers would then ask disabled people to work for them, instead of disabled people having to beg for work.
The Government should also consider the question of the subsidy for disabled people in open industry. If disabled people were assessed on a percentage basis, according to disability, the employer could pay for that percentage of their value and the Government could make up the rest. If this subsidy principle were accepted we would be well on the way to ensuring full provision for the employment of the disabled. If all of these proposals were accepted we would see the beginning of a new era for them. We would be establishing a system which would be the envy of the world—one which would ensure that our society was no longer scarred by indifference or neglect of the disabled but which accorded to them the civilised and responsible place that they all deserve.

7.44 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Michael Alison): I want to draw the attention of the House to two rather startling facts. The first is that we have been listening to an admirable and robust speech on behalf of the Opposition by the hon. Member for Stoke-on-Trent, South (Mr. Ashley) expounding to the House the deficiencies of local authorities in implementing the Chronically Sick and Disabled Persons Act. Yet, tomorrow morning in Committee I shall be listening to the hon. Member for Halifax (Dr. Summerskill) expounding on the reorganisation of the

National Health Service and saying why it is that the whole of the National Health Service, lock stock and barrel, should be swept into the ambit of local government.
I can then expect a series of magnificent speeches from the hon. Lady, the hon. Member for Stoke-on-Trent, South and other hon. and right hon. Members deploring the extent to which local authorities have failed to implement nationally agreed objectives for administering the National Health Service.

Dr. Shirley Summerskill: Dr. Shirley Summerskill (Halifax)  rose—

Mr. Alison: Could I not wait to hear the hon. Lady's case tomorrow?

Dr. Summerskill: The hon. Member will have heard the beginning of the speech of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) in which he pointed out that some local authorities had exceedingly good records. Local authorities are like people, they vary from good to bad.

Mr. Alison: If the hon. Lady is content that the mere process of time will cure all the gaps that have been reported and is saying that there is nothing inherently wrong in local government, then much of what the hon. Member for Stoke-on-Trent, South said must fall.
I want to draw the attention of the House to what is perhaps an even more startling fact. If we are to do justice to the Chronically Sick and Disabled Persons Act we ought to remember how recent is the public awareness of the needs of the disabled. Let me refresh the memory of the House because we owe it to ourselves and local authorities to get the perspective right. As recently as the General Election of 1964, less than 10 years ago, no major political party specifically mentioned the word "disabled" in its manifesto.
In the 1966 General Election, less than eight years ago, no mention of that word occurred, in terms, in the Labour Party manifesto. It occurred in terms, although the reference was a passing one, in the Conservative Party manifesto. To consider one kind of chronic sickness which comes within the ambit of the motion— that of mental handicap—the public at


large was almost totally uninformed about the extent of mental handicap and the way it was treated until the trouble arose in the Ely Hospital which was reported as recently as 1969, only four years ago.
It was only in May 1971, less than two years ago, that the Amelia Harris report "Handicapped and Impaired in Great Britain" was published and gave us the full picture of the 3 million or so people suffering from some degree of sensory, mental or physical impairment. It was only in December 1971, under two years ago, that the Chronically Sick and Disabled Persons Act was fully implemented. This is the time-scale of public awareness. It is worth making that point because the impression is given in many speeches that it is only recently, in response to this growth in public awareness, that a new weapon has been forged, namely the Chronically Sick and Disabled Persons Act.
This is muddling because it is not the case. Public awareness is new but the means, the methods and the instruments for doing something about it have a very much longer pedigree. There is not a single power or duty or qualified duty which is deployed and extended in the Chronically Sick and Disabled Persons Act 1970, fully implemented only in December 1971, which was not available under the National Assistance Act 1948 or the Health Services and Public Health Act 1968—except for passing references to the provision of television sets in Section 2 of the 1970 Act and one or two small schemes for providing transport for educational facilities. If the Chronically Sick and Disabled Persons Act is of comparatively recent origin, the lineage of the powers and qualified duties it imposes upon local authorities has a long and worthy pedigree.

Mr. Alfred Morris: On two occasions the hon. Gentleman has referred to December 1971 as the date when the Chronically Sick and Disabled Persons Act was fully implemented. I take it that he means that it was then fully activated. He said that the Act did not lay any new duty on local authorities. Where was the duty previously on local authorities to establish the number of severely handi-

capped people in their areas and to inform those people of the services available?

Mr. Alison: I will give the hon. Gentleman the exact reference in the National Assistance Act 1948. I have it in my file, but I cannot take it out now. I shall give it to him when I sum up the debate.

Mr. Morris: The hon. Gentleman will be looking for the terminology of Section 29 of the National Assistance Act 1948. What the 1970 Act did was to make mandatory something which was formerly permissive. The hon. Gentleman has written to Cornwall County Council in recent days pointing out that the Act lays a duty, not a discretion, on local authorities.

Mr. Alison: My letter to the Cornwall County Council was written in the context of a remark made by the Director of Social Services, probably in an unguarded moment, in a television broadcast. It had no general implication as to the failure or otherwise of Cornwall to implement the Act. The duty to which the hon. Gentleman refers is a qualified duty in cases where need is established. That is the duty in Section 2. Discretion is left, and properly left, with the local authorities when need is established.
I make that point because it makes nonsense of the doctrine of instant implementation, to coin a phrase, which arises from the Opposition's ludicrous motion. If between 1964 and 1970, to take the Opposition's most recent spell in office —and, incidentally, in the perspective of post-war progress a time when some of the minority groups could expect to have something done for them—armed with virtually the full panoply of powers which have been systemised and embodied in the 1970 Act, the then Government left unfinished a good deal of the business which disabled people looked to have done for them, it is a bit hard to chide the present Government for failing to achieve, after about 30 months in office, full implementation of the Act. It is a ludicrous proposition, and for the Opposition to waste the House's time by appealing for full implementation of a series of measures for which powers have been in existence since 1948 and about which they did virtually nothing in six


years in office makes the exercise a tawdry political joke.
The second reason for getting the perspective right is this: we must understand the true time scale for the Act for the sake of the disabled. The Opposition's approach to services for the disabled as based on what I will call the "big bang" approach, to use an analogy from astronomy and the doctrine of creation. Their thesis is that nothing was done nor could be done before the 1970 Act was put on the statute book but that, following it, a whole host of services, new personnel and new appliances should have sprung to life at once.
That is the myth of the "big bang" theory of creation—that one has only to say the word and a whole range of things spring into sight and operation. It is bound to mislead and, worse, to arouse ill-founded expectations among the disabled which cannot be met in the short term. Do the Opposition believe that in less than three years from the time that the 1970 Act received the Royal Assent, and in less than two years from the time that the Amelia Harris report was published, it was possible to accomplish everything under the Act for the disabled? Is that what they mean by "fully implemented"?

Mr. John Golding: The purport of the argument of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) is that the "big bang" has occurred in certain localities. The situation for the disabled in certain cities has been transformed. It is unreasonable for the Government to say that the "big bang" cannot be national. We expect leadership from the Government and a call to local authorities to achieve that which the best authorities have achieved.

Mr. Alison: A great deal has been done, but it is essential to consider this matter nationally in terms of the alternative to the "big bang", which is, in astronomical terms, continuous creation; to reflect on some of the things done in the past and which cannot all be isolated under the 1970 Act; and to put in perspective the great leap forward which has occurred since the Government have been in office.
I wish to ask the official Opposition spokesman this serious question: is it

the Opposition's belief that the range of provision about which Section 2 lays qualified duties on local authorities—the provision of practical assistance in their homes for the 3 million Amelia Harris people; the full provision of library, television, wireless and other recreational facilities; the complete range of home adaptations; the ideal level of meals-on-wheels, including hot meals every weekend for all the 3 million Amelia Harris people; the fullest possible and most generous provision of telephones across the board of the newly-found disabled—should have been fully implemented by this time, less than three years after the 1970 Act went on the statute book? That is the implication of the motion.
My right hon. Friend the Secretary of State got the scale and perspective right when recently he asked the local authorities in England and Wales to prepare and to submit to him 10-year plans for the development of personal social services. The guidelines which he suggested for the 10-year perspective involved for some services, such as meals-on-wheels and home helps, which do not come directly within the 1970 Act, an implicit expansion of provision, to the extent of doubling or tripling some of the services over 10 years. That is what full implementation means. The Opposition expect the doubling or tripling of home helps to have occurred between the time that the Act was put on the statute book and today. It is a ludicrous proposition, and to promulgate it in public is to do a disservice to the disabled who do not understand the refinements of these matters but expect something to happen, and something will happen.

Mr. Ashley: The hon. Gentleman is legitimately attempting to defend the Government, but if he is not careful he will very seriously damage the interests of disabled people because when he talks about the scale and perspective this may be seized upon by indolent local authorities. Does he embrace the scale and perspective adopted by those local authorities who have multiplied their expenditure elevenfold in one year, or does he embrace the scale and perspective of those who have not? Which does he recommend local authorities to adopt?

Mr. Alison: The hon. Gentleman must be very careful when he talks about


local authorities who have not expanded in percentage terms the scale of their service elevenfold and he must be careful in analysing the realities behind those who have shown in a short time scale no sensational increase. If an authority increases home helps from one to 10, it is not making a great leap forward but in percentage terms it is a substantial increase. A lot of local authorities which have done well in the past and have a rising standard of service are precisely those which are unable to show a massive increase in any given year.
I want to bring home to the House the true realities of what is being done and how we can justify what I call the steady evolution of services rather than the big bang theory. I refer first to Section 1 of the Chronically Sick and Disabled Persons Act because I suspect that the terms of the motion, in the dissatisfaction it expresses, are much concerned with Section 1 of that Act—the duty laid on counties and county boroughs and London boroughs to inform themselves of the numbers and needs of handicapped people in their areas and to publicise the services for them.
Implementation of Section 1, as, I am sure, the hon. Gentleman, with his expert knowledge, will agree, is a complex task. Strictly speaking local authorities would be complying with their duty under the terms of Section 1 if they did no more than establish the numbers and needs on the basis simply of properly conducted sample surveys which we suggested to them and about which we gave them guidance. In practice, however, local authorities are anxious to do more than this. They want not only to establish the likely scale of need but also to identify the individuals in need of services. Indeed, the Government have encouraged them to do both—to get some idea of the scale of need by sample surveys and then get down to the irreplaceable task of picking out the man or woman in his or her home in need of services. Generally speaking, identification of the individual in the context of Section 1 is a longer-term job than carrying out the sample survey, but in practice many local authorities have tried to do both at the same time—carry out sample surveys and identify individuals.
The scale of demand and the pressure of demand which this places upon their scarce resources of staff is a very considerable one, and incidentally, mixing up the task of preparing the estimate of the likely scale of need with that of finding individuals makes it extremely difficult to disentangle, but the progress which they are making in each direction is to their credit, and it is to their credit that they should try to do both at the same time.

Dr. Tom Stuttaford: I wonder whether my hon. Friend, in discussing individual needs, will look at the question of the relationship of VAT to costs in the home service. I am thinking particularly of the provision of kidney machines in the home. The cost has now gone up 10 per cent. in the last week. Surely this will put up the cost of a great many other things provided in the home. VAT will be paid on them.

Mr. Alison: I think I am right in saying, though I will check this and write to my hon. Friend if I am wrong, that a kidney machine supplied in the home at the behest of a hospital authority, as nearly always it would be, would come under exemption or zero rating. I do not want to pursue this at the moment if I can avoid it because it is a slightly extraneous and specialised point, but I will write to my hon. Friend if I have got it wrong.
Last summer my right hon. Friend received reports from local authorities about the initial steps they had taken towards the implementation of Section 1. The hon. Member for Manchester, Wythenshawe will remember that I reported to him the results of this inquiry —in answer to a Question on 8th August, very late in the Session. In brief, the position at that time was that 46 of 158 authorities in England had undertaken, or were planning, house-to-house distribution of leaflets; 62 authorities had chosen to proceed by sample survey; a further 35 had adopted both approaches as I described earlier, or some other method; nine reported no definite information; and six did not report at all.
As the House will realise from these figures the great majority of authorities had by last summer set about implementation in one way or another. Since then officials in my Department have been
 


in touch with local authorities about their further progress and this includes those which had nothing to report when we heard from them in August last year. My right hon. Friend intends to make a further statement about this subsequent set of reports as soon as possible, and certainly before the House rises this summer.
I am aware that a good deal of concern has been expressed about those few authorities who appear to have done little or nothing by way of implementation of Section 1. We are anxious to see that Section 1 is implemented, but until the current assessment of the position is completed it is premature to start talking about what steps might or should be taken.
I have explained some of the complexities of the implementation of Section 1 and it is too simple an approach to say that if there is no survey, or no leaflet distribution, therefore there has been no implementation. The situation is far more complex than that, and this is the very reason why local authorities must be left to decide what are the appropriate steps in their particular circumstances.

Mr. Christopher Mayhew: When this assessment is being made of the surveys, would the Minister look into the point that some of the leaflets sent out by local authorities not only do not refer to the mentally handicapped and the chronically mentally sick but actually leave a very strong impression that the Act covers only the physically handicapped? I am thinking of Reading Council, for example. Would he look into this?

Mr. Alison: I am obliged for the point which the hon. Member made and I shall have something to say about the conditions and needs which escape categorisation and specification in Section 29 of the National Assistance Act 1948 and the returns which are made by local authorities.
The hon. Gentleman and his hon. Friends have often in the past also criticised the flexibility which rate support grant in its present form gives the local authorities in the allocations which they see fit to make. There may be something in this, but I personally believe that it is inherent in a responsible form of local

government, particularly of the sort which I am sure both sides of the House wish to see developed covering large areas with wide powers, that it is vital that they should be given the benefit of the doubt and be held to be responsible before they manifestly show themselves to be irresponsible.
At the same time, as I have told the House, there will be some statistics coming forward this year both under Section 1 and under Section 2, and certainly these will enable my Department to see the efforts of different local authorities in relation to one another over a time scale which allows them a reasonable start to the services they have been asked to provide.
I believe that we can expect local political action—and there is plenty of vigour in local democracy—if some of the material we are assembling and will make available to the House shows that, against any fair and reasonable criteria of progress, there are local authorities which are not going nearly as fast as they could or should, where other local authorities have managed to do so.
I turn to Section 2 of the Act. This places a duty on the authorities, where they are satisfied that a need exists, to make arrangements in regard to a number of matters such as practical help in the home, adaptations, transport, holidays, telephones and television. At present, we cannot say exactly how far authorities have gone in developing services which arise under this section. But, later this year, we shall have the information which we are gathering at present. Each spring, authorities submit returns dealing with a wide range of their social services and this year, for the first time, those returns will include one dealing specifically with the type of help given under Section 2. When the returns have been processed, my right hon. Friend will be publishing the information and it will then be possible for the House to see how things are going and how different authorities are doing in relation to one another.
But I must warn the House that the remarkable article by Pat Healey in The Times today, almost a dress rehearsal, in a dramatic and well-publicised form, of some of the points of the hon. Member for Stoke-on-Trent, South (Mr. Ashley) this afternoon, is a mass of misleading information for those who are


not equipped to pick their way through this statistical minefield.
To give one example, I have here a note from Kent County Council, telling us that its expenditure on services for the chronically sick and disabled, excluding staff salaries and administrative costs incurred in meeting the material needs of the physically handicapped rose from £74,000 to £103,000 in the years 1970–71 to 1971–72. In 1972–73, the amount was £229,000 and in the current financial year, the council expects that expenditure will be more than £300,000. It will be seen, therefore, the council says, that, in four years, its direct expenditure on the material needs of the physically handicapped has increased fourfold.
The reason why the Central Council's figures show an apparent reduction in the service is that the methods used by Kent County Council in compiling its statistics changed between 1970–71 and 1971–72, so that no reliable comparison can be made in a statistical form. How totally misleading, therefore, are the sort of allegations implied in the "League Table" published in The Times today and how many other misleading cases, beyond that of Kent County Council, must lurk in that rather disparaging article.

Mr. Ernie Money: Is my hon. Friend aware that there are some actual mistakes in that table as well? The expenditure of Ipswich County Borough Council, which, God knows, I have criticised often enough on this subject, is recorded wrongly in the Institute of Municipal Treasurers' and Accountants' statistics as having gone down from £7,664 to £5,554. In fact there was a mistake in these figures. It went up by 50 per cent. to over £11,477 for the period 1971–72.

Mr. Alison: I am obliged to my hon. and learned Friend for an important contribution on behalf of an authority which was singled out for criticism. I hope that The Times will undertake to give as wide publicity to the errors and misrepresented features of that article as were given in the first place when it was brought to the attention of the public in this dramatic way.
However, even without these figures, we have a very useful measure of the

real progress which has been made. This is the financial measure. Help given under Section 2 forms part of the services for physically handicapped people, including the blind and the deaf, provided under Section 29 of the National Assistance Act, 1948. In the financial year 1971–72, the cost of this service in England and Wales was a little more than £16 million. In real terms, that expenditure represented an increase of about 12½ per cent. over the previous year. So the first full year in office of this Government enabled us to secure an increase in real terms of 12½ per cent. in expenditure on the admittedly narrow category of physically handicapped people embraced by Section 29.
Estimated expenditure on the same services will in real terms be about 50 per cent. higher in the current year than in 1971–72. We thus arrive at the position that estimated expenditure for the current year will be in real terms about 66 per cent. higher than three years ago. That is what this Government have done in the very short period that we have had in office towards implementing the duties long inherently laid upon earlier Governments by the National Assistance Act and the Health Service and Public Health Act.
These figures, of course, do not give the complete picture of what has been done even then. The House knows that one of the difficulties in estimating our scale of provision for the chronically sick and disabled is that services are rendered to them under various headings in which they are beneficiaries but not separately identifiable. Taking expenditure on personal social services at large, therefore, the increase between last year 1971–72 and the end of 1973–74 will be no less than 21 per cent. in real terms. This goes on the same people, the physically handicapped who can be accounted for under the relevant section of the National Assistance Act of 1948, but it gives some idea of the scale of extra expenditure for which we have been providing.

Mr. Charles Simeons: Since these figures are available for my hon. Friend to give to the House, would he consider how they might be published locally, so that those of us who are keen to see that councils and authorities keep up to scratch may judge them accurately?

Mr. Alison: As I said, we shall be publishing the performance figures later in the summer under at least some of the headings of expenditure, but my hon. Friend will appreciate that the latest figures that I have given, the very large increase in financial terms in central Government provision, can be lost rather when the distribution takes place through rate support grant, because many local authorities, owing to the varying needs elements, get a different proportion of the total sums made available under rate support grant negotiations. The physically handicapped are fairly easily identified on the kinds of returns that local authorities can make and have been making, although these do not by any means include some of the categories of need which are most pressing for local authorities to deal with.
I come now to the important point made by the hon. Member for Woolwich, East (Mr. Mayhew)—namely, the services provided under the broad heading of the mentally handicapped, who are not included in the physically handicapped category on which the National Assistance Act laid such stress. Here, the increase in services, both at central Government level and locally, have been massive. The hon. Gentleman will know, I think, the special encouragement that my right hon. Friend gave this section in the White Paper "Services For The Mentally Handicapped". It included a specific table of the targets to be met in a short term—something like five or six years.
Substantial progress is beginning to be made towards reaching those targets, against the background of a good deal of neglect in the past. These figures do not appear in the sort of statistics that The Times produced today.
The provision for the mentally handicapped in hospitals—this is a category of the sick and disabled about which the motion speaks—has benefited by no less than an 80 per cent. increase in provision in real terms compared with what the last Government did in their concluding years. That is an increase of 80 per cent. over the period 1971–76.
One could elaborate the range of extra money that the Government have brought forward almost ad nauseam—the special provision for the younger chronic sick; the special provision for the disease of

alcoholism, a critical and in many cases, alas, a chronic disease; and the cash benefits, like the attendance allowance and the invalidity allowance. There is simply no end to the range and scale of innovations in financial provision and in provision in kind which this Government have seen fit to give priority to in our three short years in office. It has been on an unprecedented scale.
Yet the Opposition have the effrontery, after years in which these powers lay to the hands of Ministers and hence to the hands of local government, after long periods when they have been in office and did absolutely nothing, to try to persuade the House that, in three short years, we should fully have implemented every conceivable kind of provision for the chronically sick and disabled.
This is a motion which the Opposition manifestly do not believe themselves, and if they examine its implications it proves to be simply a bogus charade trying, I am afraid, to mislead, perhaps, the voting public in some dimension, to think of the shortcomings of which the Government are alleged to have been guilty. The fact is that the Opposition have hit the wrong target. The damage is most regrettably done to the very people whom I believe both sides of the House are only too anxious to help—those who have for too long been neglected but for whom it is not possible overnight, by waving a magic wand, to put right the years of neglect for which both parties are admittedly responsible. But we on this side have made a better start than ever before, and I think that the country will appreciate it.

8.20 p.m.

Mr. Laurie Pavitt: The Under-Secretary of State has made a very selective case and has done less than justice to the Opposition, because, although he is able to claim the progress that has been made over the last few years, he has omitted to say that one of the reasons for that progress is that the Opposition have had the effrontry to keep prodding and pressing. He has also failed to give sufficient credit not only for the way in which the Act brought the matter into public focus far more than did either the Ely or the Farley Report, but also for the way in which public attention was focused on the Act and


the way in which the organisations themselves were brought together by my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) in order to continue the pressure both nationally and locally.
The Under-Secretary made no mention of Sections 17, 18 and 19, yet it is those sections that cry directly for full implementation by regional hospital boards and management committees, and are therefore his responsibility. The hon. Gentleman spoke of a 10-year plan. It is appreciated that there must be a long-term planning provision, but I know of no Government as good as a Conservative Government for being able to hide behind 10-year plans as a means of staving off constant criticism, such as we have heard in this debate. I recall the 1961 five-year plan on hospital building, which by 1964 had not even reached the starting expenditure envisaged.
Because this is to be a short debate I shall concentrate on the full implementation of Section 24, which deals with the problem of hearing research. At this point, I hope the House will forgive me if I take the opportunity of making an apology to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) and in doing so make a statement for the record which I hope will clear up any past misconception.
Clause 24, as it then was, was an attempt to give hearing research a national centre—a focal point and an apex of co-ordination. When the measure was in its early stages my hon. Friend the Member for Manchester, Wythenshawe gave us all the opportunity to put forward our ideas on the subject, and my hon. Friend the Member for Stoke-on-Trent, South was able to put forward the clause which helps the deaf who are also blind. I was privileged to put forward four clauses the subject of only one of which succeeded in reaching the final legislation, as Section 24. Although the original clause was drafted by me, before it reached the Committee I had a long consultation with the Department of Education and Science and other interested bodies. Before the Committee reached the clause I went off to America to tell them about socialised medicine, and I dropped that baby of mine in the lap of my hon. Friend the Member for Stoke-on-Trent, South. I

am certain that had I persisted in that clause as I had drafted it, it would never have reached fruition, but my hon. Friend was able to get it through. Probably nobody else in this House could have done so.
If there is one Member of the House from whom no one would wish to take credit it is my hon. Friend, and if there is one hon. Member who would the least want to do so it is myself, who knows perhaps better than any other Member the problems with which my hon. Friend has so successfully and courageously coped.
I put that on the record because I want to give some information on the implementation of the section. In doing so I quote from a speech by Sir George Godber, Chief Medical Officer of Health to the Bath Institute of Medical Engineering. Sir George said:
Perhaps one of the most worrying shortcomings in the clinical field is the diagnosis, treatment and rehabilitation of the deaf…. True, no one has produced much technical progress in any country, but here we are in the 25th year of the National Health Service having made very little progress in providing further assistance for the deaf, and we are dealing with over half a million people who could benefit if we could find the means. This is an area in which I cannot help feeling that neither medically nor scientifically, nor through the administration have we given as much support as we would have done to medical or non-medical scientists".
It is on the basis of this analysis by our own Chief Medical Officer of Health that Section 24 and its implementation receive full significance. What happened as a result of the section drafted by my hon. Friend was that the Department of Health produced a report as long ago as April 1972 and, as charged by the provisions of the section, presented that report to the Medical Research Council. The council set up a sub-committee on which I was privileged to serve and, as a result, stated in its final report that it had come to the conclusion:
There are three main areas of research related to deafness in which additional research effort particularly needs to be encouraged because the results are most likely to be of practical benefit to the deaf. These are concerned respectively with clinical and epidemiological studies, fundamental studies relevant to the development of new types of instrumentation to aid hearing, and research related to education, rehabilitation and social adaptation. The objectives of the research required in the clinical and epidemiological


fields can be best attained by means of multi-centre studies and by encouraging the development of university departments of otorhinolaryngology.
It is to the shame of the country that there are now only two university chairs in this subject—one in Manchester and one in Gray's Inn Road. This is a neglected field academically, clinically and socially.
As a result of the sub-committee's deliberations the implementation of this section now falls quite neatly into the lap of the Secretary of State because the deliberations have been completed and the report of the Medical Research Council is in the right hon. Gentleman's hand. The report, covering a wide area of activity, says:
Nevertheless, this does not exclude the need for establishing, within existing machinery for the support of research, some form of overall mechanism for co-ordinating research at various centres and providing a focal point for the collation and dissemination of information.
It is as a result of the efforts of my hon. Friend the Member for Stoke-on-Trent, South that Section 24 has finally found acceptance by the Medical Research Council, which puts its implementation back to the Secretary of State. I say that because the council has hitherto been the sole responsibility of the Department of Education and Science, but as a result of the Rothschild and Dainton Reports, £5·6 million is now involved in a customer-contractor relationship between the Secretary of State and the Medical Research Council.
It is therefore no good the Undersecretary shrugging off responsibility by saying that in this case what has to be done rests with local authorities. The responsibility rests on the shoulders of his right hon. Friend and himself, and I hope that as a result of this debate there will no longer be any delay. I know that the hon. Gentleman has not had the report on his desk for more than a fortnight, but with that full information before him there is no need why there should be further delay, and why the various recommendations should not be proceeded with and implemented forthwith. There is no reason for the hon. Gentleman to charge anyone else with the responsibility. It is in the hope that that responsibility will be discharged that I plead with the

Under-Secretary to get a move on and do something for those who suffer from this form of deafness—and also to do something by way of research to help those who, like some of us in the House, have to face this form of disability. This is not only to prevent deafness from occurring but to support those coping with this form of disablement.

8.30 p.m.

Mr. David Crouch: I must first apologise to the House since I shall have to leave before the end of the debate. At the moment I am meant to be in another place, by which I do not mean the traditional "other place" but at another conference. I intervene only to inform the House about my own constituency. When we last debated this Act just over a year ago the city of Canterbury came in for considerable criticism.
My hon. Friend the Under-Secretary was right to question the wisdom of the Opposition in moving this critical motion. We do not help the disabled by making a party issue of them. In my dealings with the disabled I have never felt that there is any question of a party issue being involved. I have always felt it necessary to adopt a bipartisan, even a tripartisan—an all-party— approach to solving problems which are on everyone's conscience, whether an ordinary citizen, a person in local government or a Member of this House. As a result of this debate the disabled may feel that they have not been well served by misleading statements in The Times and by scaring suggestions that not enough is being done. At the same time, however, they will be compensated in some measure by knowing that they have been talked about and thought about in this debate. In that respect I make no criticism of the motion.
I come to my main point which concerns the one-time criticism of Canterbury. It was said that the city, as a county borough and a responsible local authority, had not been spending enough money in implementing the Act. That was the criticism a year ago. But it has been pointed out already that statistics may be misleading.
A year ago when that criticism was expressed I found on investigation that the money spent on adaptations to council houses to make them suitable for disabled


people had been charged to the housing revenue account and had not shown up as expenditure on the implementation of the Act. We have heard from my hon. Friend the Under-Secretary about similar misleading statistics which have been drawn by the Central Council for the Disabled from certain counties, Kent especially.
As a result of the criticism, we in Canterbury got down to the problem. When I say "we", I mean myself, the local authority and a great many other people. Our first move was to carry out Section 1 of the Act, which in my view is the most important part of it, to identify the size of the problem and to identify individuals. An extensive survey was made. It was carefully planned and prepared. This took time. In this case we were lucky to be assisted by the University of Kent, where there is considerable experience of this type of survey work on the social sciences side. The city council set up a special steering committee to undertake the task.
There was no shortage of volunteers in this work. Students, school children and many ordinary and busy citizens gave their time willingly to assist in this work because they were very anxious to help. They knew that the work was required and they came forward. I was present at the inaugural meeting which called for volunteers and put forward this carefully prepared plan to the citizens of Canterbury.
It was very encouraging to see right away that there was no party issue at stake. All the parties were represented and all played an equal and strong part. There was never any question of trying to see who was representing one party political interest or another.
It is relatively easy to tackle a small county borough and city like Canterbury with a population of only 35,000 and with a very small area to cover. This makes the work easier. Even so the plan had to be prepared carefully. I believe that the House will be interested to know what was done.
A questionnaire was prepared. A copy was delivered by hand to every household in Canterbury. Each was followed up by a personal visit, which is where the volunteers came in. The interviewers were selected carefully. People can be

put off by an interviewer trying to find out about disability, illness or age. The interviewers were carefully trained and advised in this regard. It was not just a matter of counting heads or identifying numbers. People were asked what help they needed in their difficulties and in that way made their own contribution in addition to supplying basic facts about the numbers involved.
The answers which they gave and which are now revealed in the completed survey were, among others, that they needed help with stoking fires in their houses, with carrying coal, and so on. They needed someone to prepare, collect, deliver and put out laundry. They needed help with the task of moving dustbins to front doors or front gates. All the time they needed more people to call on them.
This was not a cold survey or analysis of the number of people involved, with the imprint of local government officialdom. There was nothing like that about the survey. Its main aim was to offer help where it was needed.
The full survey from the whole city revealed the following figures—and I give three interesting ones. Out of a population of 35,000, 770 were found to be substantially handicapped. That figure represents 2·2 per cent. of the total population. Of that number, 558 were over 65 years of age; in other words 10·3 per cent. of all the people over 65 in Canterbury were found to be handicapped. Of the total, 52 were children under 16 or 0·68 per cent.
The survey also revealed the way in which people could be helped. There was a need for greater mobility to be provided in the home by means of adaptations to houses. This is very important. The exact details of a person's handicap were recorded, including the disease or illness from which they were suffering, their deafness or blindness and the degree of it. Another very important detail was whether a disabled person lived alone or with one other partner. On that final point, I have this revealing and sad statistic. It was discovered that 244 disabled persons lived alone and that 299 lived with a partner.
Having made the survey and having thus implemented Section 1, it was necessary to see what action should be taken. The following action is now being taken in Canterbury. The city council has set


up a special unit for the handicapped. It is working to provide the adaptations to houses which the survey showed to be necessary, and this programme is being speeded up. Already between 30 and 40 telephones have been supplied free. More will be provided. Consideration is being given to the extension of the adult training centre which is quite new but which is no longer big enough.
Paragraphs 45 and 46 of Cmnd. 5280, published this afternoon by my right hon. and learned Friend the Secretary of State for the Environment, do not neglect the urgent requirements of the disabled. Paragraph 45 speaks of the need for
an adequate supply of purpose-built accommodation
for the disabled.
Paragraph 46 speaks of the need for
small houses or flatlets grouped under the supervision of a warden.
Canterbury does not lack these facilities, but it does not have enough of them I am glad that my right hon. and learned Friend, by including those paragraphs in the White Paper, is signalling that the Government are prepared to be generous in their provisions to local authorities, thus giving local authorities the green light to make provision in this regard.
In conclusion, it is one thing for the House to criticise. It is our duty to criticise, whether we criticise people, local authorities, or Whitehall. It is one thing for the Act to talk of a duty. That is all the Act does. It does not impose any great penalties on local authorities not carrying out their duties. There is no penalty for a local authority which does not react to criticism from the House.
What we need to implement this Act is a determination to do so and a great deal of energy. If those two qualities are found in local authorities—I have no evidence that they are not there already—the volunteers will come forward in great numbers. If the debate does anything, I believe that it will generate that amount of publicity, especially with the Under-Secretary's wise remarks, which will stimulate still further local authorities to action.
The Government have not been ungenerous. There is no need for local authorities to feel in any way financially restricted. Section 1—the survey—is the essential starting point. The cruel facts

it reveals will give rise to the energy which will complete the job.

8.41 p.m.

Mr. Frank McElhone: It is third time lucky for me. The presence of the Under-Secretary of State for Health and Education, Scottish Office is a consolation to me and to many handicapped people in Scotland. The Secretary of State for Social Services will remember that I made these points in the debates on 18th December 1970 and 21st February 1972.
Scotland is treated rather shabbily in these debates. Either no Scottish Minister is present or, if one is present, he has no opportunity to answer the points which are made about the disabled in Scotland. In future debates of this kind there should be some collaboration with the Secretary of State for Scotland, who has always proclaimed that he is an advocate on behalf of the disabled in Scotland. He should be able to speak on their behalf.
Another point which disturbs Scottish Members is the lateness in bringing out reports about social work in Scotland. The only way of our being informed in this regard, apart from Question Time, is through social work reports. Whereas reports for England and Wales are produced early, the social work report for Scotland for 1971 was not issued until November 1972. A similar situation exists in regard to the report about the separation of the younger chronically sick in geriatric units.
Many Scottish local authorities had great doubt about the implications of Sections 1 and 2. However, a Private Member's Bill sponsored last year by my hon. Friend the Member for Greenock (Dr. Dickson Mabon) and myself, amongst others, did much to remove that doubt. I am sure that local authorities in Scotland are now in no doubt that they, just like local authorities in England and Wales, are under a duty to implement every section of the Chronically Sick and Disabled Persons Act 1970.
Is Scotland getting a fair deal for its disabled on a pro rata basis? On 21st February the Secretary of State listed the Government's efforts for that year and compared the efforts which had been made by the Scottish Office. This showed that Scotland is not getting a fair deal.
I quote some figures to show that my argument is sound. In England last year there was a 5 per cent. increase in home nursing and an 8 per cent. increase in home helps; 38 new assessment centres were provided for disabled young people; there was a special review of services for the blind and the deaf; and three special centres were set up for the study of epilepsy. These things are very welcome. Although they may be inadequate they are far better than the provisions in Scotland, which is suffering very badly indeed.
I made this point in the Scottish Estimates Committee in July. So far as I am aware, no attempt has been made by the Scottish Office to correct the imbalance between England and Wales on the one hand and Scotland on the other. I am sure that anybody who listened to the Scottish rate support grant debate will be of the same opinion.
I was glad to hear the Minister say that there has been an increase of 66 per cent. in the amount of expenditure on the disabled in England and Wales, but in Scotland the increase in spending on the social services was only 9·6 per cent. With inflation raging at 10 per cent., we are only standing still. The need to spend more has been brought to the notice of the Secretary of State for Scotland time and again, especially at Question Time.
The Minister referred to the motion as a tawdry joke. On Scottish television many advertisements implore the disabled to go out and seek employment. One sees how dishonest those advertisements are when one considers the rate support grant and discovers that sheltered workshop expenditure is among the also-rans. It is grossly unfair and misleading to keep advertising and asking the disabled to go out and work while not spending the money to provide the workshops that are so badly needed in Scotland.
I now refer to telephones, of which there is a great need in Scotland. It is to the credit of the Secretary of State that on 12th October he sent a circular to local authorities indicating that there was no real problem in providing telephones and that it was only a question of getting the co-operation of the Supplementary Benefits Commission. My infor-

mation is that there is a difficulty, because the commission is not providing the necessary finance. The Secretary of State said that he was arranging for cooperation between the commission and local authorities, so that no difficulties would arise.

The Under-Secretary of State for Health and Education, Scottish Office (Mr. Hector Monro): I am glad the hon. Gentleman raised the question of telephones. Two years ago there was hardly a telephone in Scotland for disabled persons. Now the figure is approaching 500, so we are making substantial progress.

Mr. McElhone: I accept that there is progress, but I would hardly say that it is substantial, particularly bearing in mind the number of disabled and handicapped people, many of whom cannot move from their homes. In my constituency there are 770 people who cannot leave their homes because they are badly disabled. Five hundred telephones for the whole of Scotland is grossly inadequate by any standard.
In a Parliamentary Question I asked how many local authorities had provided telephones, and in May 1972 I was told that the information was not available. I should like that information to be available, because we have asked for it several times. If surveys were carried out among local authorities, as they should be, under Sections 1 and 2 of the Act, they would show that the need for telephones runs into thousands rather than a mere 500.
It is necessary to be brief in this debate to allow other hon. Members to speak, but, speaking with some presumption for the whole of Scotland—[Laughter.] I am glad that other Scottish Members are laughing, but there is so much that could be said. I refer to a letter written to me by the Secretary of State on 12th July 1971. It is necessary to go some time back to let hon. Members know what the Secretary of State is doing in Scotland. His letter said that he was to examine urgently a scheme set up by Edinburgh University to make a proper assessment of the disabled. That was 1971, and we are still waiting for an indication from the Secretary of State of any action taken by either the university or him.
We are disturbed that nothing substantial has been done for the young chronic sick who are in geriatric units. The figure I have shows that 427 young Scots are in geriatric units—units which accommodate people aged between 75 and 80, who are often mentally unsound. Not only do these young people suffer physical pain and handicap; they suffer mentally by being incarcerated in these places. No effort is being made in Scotland to deal with this problem, yet when one considers hospital building progress, to which I have referred in question after question, if one takes the Western Regional Board, which covers a wide area in Scotland one discovers that its programme consists mainly of building more and more geriatric units.
I believe that we have the wrong end of the stick, although many may say that with advances in medicine and antibiotics the elderly disabled are being kept alive longer and that the answer is to build more and more geriatric units. It must be obvious to the Minister that these are not only costly to build but very difficult to staff. By the time a person is admitted into that type of unit, he or she is often in a poor way, because in the main these disabled people, more than any other section of the community, suffer from a lack of nutrition.
If anything came out of a survey which I made 18 months ago it was the fact that the nutritional problem among old people is a very real one and that disabled people often spend more to get enough food to keep themselves alive and to heat their homes.
The Minister must take some cognisance of another aspect of the problem. If he were to spend sufficient money on home helps and home nurses, with the back-up of medical services and proper nutrition for these disabled people, about 70 per cent. would not have to go to hospital. In strictly commercial terms —and such terms seem to appeal more than anything else to this Government— millions of pounds could be saved. It was clear from the Minister's opening speech tonight that England and Wales are again receiving a great deal more financial benefit than is Scotland.

Mr. Monro: I hesitate to interrupt the hon. Gentleman again. I know his interest in the disabled and in social

matters of this kind, but I hope that he will not misrepresent the case in relation to Scotland. Between 1971–72 and 1974–75 there will be an increase of expenditure on social work services from £34 million to £44 million. That also shows substantial progress. Hardly any social welfare project has been held back through lack of finance.

Mr. McEIhone: I accept the accuracy of that figure, but if the hon. Gentleman is saying that over five years there will be an increase of £10 million—

Mr. Monro: Three financial years.

Mr. McElhone: Three financial years —but we shall probably find that that spreads over four years. However, let us not argue about that. The fact remains that in percentage terms what the Under-Secretary told us tonight in relation to England and Wales shows that we are still doing very poorly in Scotland. He spoke of 66 per cent. The increase for Scotland, to which the Minister has just referred is nothing like 66 per cent.
It is noteworthy that the nutrition study which started in, I think, 1968 has still not reported. I hope that we shall hear about it in the Minister's speech.
The Under-Secretary of State made some abusive comments about our motion, saying that it was a tawdry joke and a bogus charade. Anyone who understands the real problem in Scotland knows that that is a dishonest remark. This Government, more than any other in the past, have an overdraft in integrity. That is true by any standards, as we all know.
The Secretary of State, who has repeatedly put himself forward as a champion of the disabled, seems always to miss these important debates. I always receive a letter of apology from him. I agree that he is going somewhere else tonight and he probably had a prior engagement. But I want him to show in the House, and in St. Andrew's House, the sort of action which he promises in the speeches he makes in Scotland at the weekends. He has made so many promises to the disabled that he would do well to remember the words of Robert Frost—
For I have promises to keep
And miles to go before I sleep".

8.58 p.m.

Mr. David Price: Just to keep the record straight, I begin by declaring once again my personal interest in the subject of disablement, and I trust that my personal involvement with disability will not prejudice the House against me.
This is a short debate, and I shall confine myself to three general points. I refer, first, to our whole attitude to severe disablement. As my hon. Friend the Under-Secretary of State rightly said, only in the last few years has the whole range of problems concerning the civil disabled become a proper subject of informed debate. Previously, the political parties and the House itself concerned themselves only with the war disabled, with the industrially disabled, with disabled children and with disability within hospitals. What we have become aware of since, or have been made aware of since, is the extent of severe disability among our fellow citizens.
We are especially grateful to Amelia Harris and her fellow researchers for so clearly identifying the scale of the problem and the terrible neglect of the past. We are addressing ourselves tonight principally to the severely handicapped, the 1·1 million or so persons over the age of 15 living outside hospitals and institutions. If we add the severely handicapped children who were outwith Amelia Harris's survey, we have a total of about 1¼ million severely handicapped. I think that the House would do well to take her distinction between the greater number whom she identified as being impaired and the lesser number who are severely handicapped.
One and a quarter million people is a formidable figure in any man's language. But as we begin to examine in depth the variety of problems facing these 1¼ million people the differing personal needs requiring to be satisfied appear even more formidable. I believe that we shall begin to satisfy those needs only when we cease to think of those disabled people as objects, recipients of society's good works. We must start thinking of the disabled as subjects and not objects. We must regard them for what they are—as human beings who are continuously helping themselves to overcome severe handicaps in the daily run of their normal lives but who require

further help from outside in order to fortify that process of self-help.
Furthermore, we should cease to regard severe disability as being abnormal or extraordinary. After all, 1¼ million of us are severely disabled. Instead I suggest that we should regard severe disability as quite normal. Any one of us here could find ourselves severely disabled, and that is a very cautionary thought. So when we talk about the disabled we might be talking about our own personal future. A person does not become a different person when he becomes disabled. He does not cease to be a human being. These people have all the normal heartaches and passions that flesh is heir to. Let us start regarding the disabled, therefore, as normal human beings and not as objects of our pity or of our political manœuvrings. Let us regard them as ourselves, because they may well be ourselves tomorrow.
My second point follows from my first. Until all local authorities understand emotionally as well as intellectually that it is normal to be disabled we shall not, in my judgment, see the Chronically Sick and Disabled Persons Act 1970 implemented with the determination and enthusiasm which it deserves Let me take two examples. A person living in a wheelchair lives in a two-dimensional world. Every curbstone is a major obstacle and every flight of stairs is a complete impasse. Often such people cannot get out of their own homes without help from someone else, and there is nothing in terms of self-help that a wheel-borne citizen can do to overcome such three-dimensional objects.
That is why Section 4 of the Act is so vital. It is also why the lack of progress is so frustrating. The same reasoning applies to Section 5 which deals with the provision of public sanitary conveniences. Here the record to date is often worse. I should like every candidate in the forthcoming county and district council elections to spend a day in a wheelchair doing the rounds of his electoral area before polling day and he would then understand what I am talking about. Incidentally, he would require a very strong bladder.
My third point is that there is one thing which all severely disabled people require and that is a disability pension as of right and without a means test.


Of course, it would be ungracious of me not to acknowledge the progress which is being made in this direction by my right hon. Friend the Secretary of State for Social Services. I refer of course to the creation of a new lower rate attendance allowance following the successful establishment of the constant attendance allowance, now called the higher rate attendance allowance. There has also been the institution of the invalidity benefit which has helped some people. Will my hon. Friend the Minister indicate to us the number of severely disabled people who are benefiting from the invalidity benefit who were excluded from any benefit before?
All this progress is in the direction of a disablement income. But to those of us directly involved there is a long way to go before we can feel reasonably content that the financial needs of the severely disabled are adequately covered. I am a member and therefore a supporter of the Disablement Income Group. I hope it is no longer necessary to deploy in detail here the case for a disablement income. I am pretty sure that right hon. and hon. Members in all quarters accept the broad case for it.
Many hon. Members are somewhat uncertain about how we move from the present position to the position which is desired. I suspect that that is true of both Front Benches. I am prepared to accept the establishment of disabled income by instalments, provided the instalments are sufficiently large and sufficiently frequent.
I should like to make two positive suggestions for two instalments which could be made this year. The first is to widen the definition of eligibility for attendance allowance. The present definition is very narrow. It refers, in particular in the first leg, to "bodily functions". It should be broadened to include the idea of self-care—a phrase which frequently occurs in the Amelia Harris Report—and the ability to fulfil domestic duties appropriate to a citizen's age and marital status.
It is a major obstacle to a person not to be able to fulfil normal domestic duties appropriate to his or her age and status. That might provide a third leg to the definition under the attendance allowance.
Secondly, my right hon. Friend might consider building on the concept of the invalidity benefit. Here the most urgent priority is to bring in disabled housewives with dependent children. Chapter 17 of Amelia Harris's survey shows that in this connection we are talking about 100,000 women at the most. It would be of great assistance if my hon. Friend announced tonight that the Government will issue an early Green Paper on the methods and instalments by which they intend to reach a disablement income as of right for all severely disabled persons without a means test. The industrial injuries benefit is a good model of what we want.
I ask my right hon. and hon. Friends to help us to help them to help our fellow citizens to help themselves.

9.8 p.m.

Mr. David Weitzman: I am glad that the Under-Secretary has returned to the Chamber, for I wanted to tell him that during the long years I have been in the House I have rarely heard a more impudent defence to a motion of the kind before us than that which the hon. Gentleman advanced. He belittled the effect of the provisions of the Chronically Sick and Disabled Persons Act by asking, "What on earth did the Act do?". He said that all the powers existed before, and that all that the Act did was to summarise them.
The hon. Gentleman should look up the provisions of the National Assistance Act 1948 and of any other acts that have anything to do with the Chronically Sick and Disabled Persons Act. He will find that he is completely wrong. It is true that certain powers were given under the National Assistance Act 1948 and that certain functions could be exercised by the local authority. But if he takes the trouble to look at Section 1 of the Chronically Sick and Disabled Persons Act, and particularly subsections (1) and (2), the hon. Gentleman will find that it put a mandatory duty upon local authorities that did not exist before.
In the same way, if the hon. Gentleman will apply a legal mind to Section 2 he will find that what he said about that is wrong. A duty was there put upon the local authorities with regard to their functions under Section 29 of the


National Assistance Act concerning people who satisfied certain needs.
The hon. Gentleman was wrong on another point. He talked about the Labour Government's not having implemented the powers that existed under the National Assistance Act. What was the Conservative Government doing from 1951 to 1964 in the way of implementing those powers? Let the hon. Gentleman blame his own Government. I have rarely heard a more impudent defence than the hon. Gentleman advanced.
The 1970 Act, piloted through the House by my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) and supported by all hon. Members, was one of the most important Acts we passed. It was rightly described as a charter for the disabled—a long-neglected class, as the Minister himself said.
Section 1 of that Act makes it mandatory for all local authorities to maintain a register of disabled and to publicise the services it must provide under Section 2. Section 1 is the basis of the Act. Without it, without knowledge of who were the disabled and the services provided, there was little hope that the disabled would be helped at all.
I had the honour of being a member of the Standing Committee that considered the measure, and of giving some help in drafting those sections. It was envisaged then that they would be efficiently and promptly implemented.
The Minister said that the motion speaks of "ensuring full implementation" and he asked, "Would the Opposition expect us fully to implement the provisions?" Nobody suggested that the Government should fully implement the provisions, but they should go well along the road to doing something concrete to establish what is meant by the Act.
Nearly three years after the Act was passed, some authorities are carrying out their duty in a praiseworthy manner, but too many are unfortunately lagging behind, apparently either not knowing of their duties under Sections 1 and 2 or doing far too little to carry out those duties. I do not lay the blame so much on the local authorities; I lay it squarely on the Minister, on the Government.
Figures provided by the Institute of Municipal Treasurers and Accountants show gross inadequacy on the part of certain local authorities. We read and hear criticism of those figures. It is said that they do not represent the true position, but the Minister has refused so far to publish a report showing the true position.
What should be done? First, the Minister should respond to the appeal made to him on many occasions to publicise by television, radio and the Press the duty put upon the local authorities to prepare and maintain a complete register, and to inform the disabled of the services provided for them. Local authorities should be encouraged to seek the aid of voluntary bodies, which are only too eager to assist them to carry out the task.
If too great a financial burden has been placed on the local authorities, further finance should be provided by the Government. This would be a far better way to spend the £15 million that is to be used to subsidise the building societies, who say that they neither wanted nor asked for the money.
The Act calls for the provision of housing accommodation to meet the special needs of the disabled. What has been done in that direction? It provides for special access to public buildings and sanitary conveniences for the disabled. What has been done about that? It calls for the provision of education facilities for certain disabled children. What has been done about that? Those are only some of its provisions. Why has the House not had an opportunity, provided by the Government, to discuss these matters?
Two annual reports have been produced under Section 22 which deals with research and development—sparse and unsatisfactory and giving little information that could not have been obtained elsewhere. The Government stand condemned for their failure to provide reports on what has been done so that provision for the disabled could be discussed comprehensively and in detail. I ask the Minister to remind himself of the many questions with which he has had to deal, for it has been left to the individual Member to get information by asking Questions.
The motion speaks for itself. Despite what the Minister says, it clearly expresses condemnation of the Government's failure.

8.17 p.m.

Mr. John Astor: I cannot accept the interpretation that the hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman) has put on the speech of my hon. Friend the Under-Secretary. My hon. Friend did not seek to belittle the provisions of the Chronically Sick and Disabled Persons Act, but he made a realistic speech about progress. On the other hand, I fully understand the impatience of the hon. Member for Stoke-on-Trent, South (Mr. Ashley). I put that down entirely to enthusiasm, because the hon. Member works as hard for the disabled as anyone else in the House.
It is true that all those of us who were privileged to serve on the Committee which considered the Act perhaps over-optimistically thought that progress would be quicker. Some worrying features in the report prepared on behalf of Action for the Crippled Child have been mentioned. It is worth noting that six authorities have not taken any steps to prepare a register, and among those which have there have been wide variations in the figures of the disabled. The average figure is about 28 disabled per thousand population. The figure disclosed by some authorities is as low as five or eight per thousand, and that suggests that those authorities have not tackled the roots of the problem.
There are variations in the implementation of Section 2, which deals with the provision of television sets, the installation of telephones, recreational facilities, transport and education facilities and so forth. The hon. Member for Stoke-on-Trent, South rightly pointed out that some authorities have done very well. We should all be more satisfied if the standards of the less good were brought up to the standards of the good, and I urge my hon. Friend the Under-Secretary to do what he can to bring the bad authorities up to the standards of the good.
Much good has already emerged from the Act. One example is increased awareness. My hon. Friend mentioned the public's awareness of the problems of the

disabled, but I bring it much nearer home, for there is much greater awareness among hon. Members of the problems of disablement. There is no party advantage in this issue, for neither party has had a good record in its treatment of the disabled. It is only as a result of pressure from both sides of the House that in recent years the problem has been more fully recognised and understood, with the result that some action has been taken.
Another good thing that emerges from the report is that some original ideas are being adopted by different authorities. One authority, for instance, has appointed an architect who specialises in the conversion of houses to meet the needs of disabled people. Other authorities have original ideas about providing holiday and transport facilities. If the less-good authorities follow the example of the good authorities and pick up the best ideas, they will make progress and be of real benefit to the disabled community.
There are signs that some authorities have had the wisdom to realise that often expenditure on behalf of the disabled— such as the adaption of a disabled person's home—can save money for the country as well as bringing a degree of independence to the disabled person.
I should be the first to welcome any further improvements, but it is only fair to refer to what has been done in the last two and a half years. There has been the introduction and expansion of the attendance allowance. The invalidity allowance and pensions for the over-80—many of whom are chronically sick and disabled—have been introduced. An additional benefit of 25p is provided for retired pensioners who are over 80.
My hon. Friend the Member for East-leigh (Mr. David Price), who has just left the Chamber, referred to various other improvements for which we hope and look forward. Among those improvements is provision for the housewife with dependent children. I also hope that it will prove possible to raise the limit of the earnings rule so that all disabled people who cannot lead a completely full life and who have lost some of their earnings power will be able to retain and hold a job which will give them some income —perhaps not a living wage—and a great


deal of independence, satisfaction and pride. I hope that before long improvements along those lines will be introduced.
The Disablement Income Group has been effective in its campaign over a number of years. It was fair in its statement which it issued in June in pressing, and rightly so, for an invalidity pension, when it said:
We shall be foolish and churlish if in our keenness to get more help where it is needed we overlook the remarkable progress made for us by Sir Keith Joseph.
People who are concerned about the disabled, and those who try to do what they can to help, recognise the tremendous progress that has been made. It is equally recognised that a lot remains to be done, and I hope that we shall see improvements being made.

9.23 p.m.

Mr. John Golding: This is a political debate. The Government have had the choice between doing more or less for the chronic sick and disabled. In the Finance Bill the Government chose to give £300 million to the rich. I should have preferred them to give £300 million to the disabled.
It is important that Labour hon. Members censure the Government for their lack of activity. It was important that the hon. Member for Canterbury (Mr. Crouch) revealed that the previous debate on this matter—which the Government deplored because it was political— brought about a transformation in Canterbury.
It is important that the spotlight be put on the local authorities that are not fully implementing the Alf Morris Act. I am concerned about the provision of telephones I know that members of my union—the Post Office Engineering Union—are working voluntarily in their own time to install telephones for the disabled. I am disturbed when it is reported that in many instances their offers are not willingly accepted because of the bureaucracy of local authorities, namely, their reluctance to implement the scheme. Members of my union have become discouraged because their offers to work for nothing to install telephones have not been accepted in the spirit of those offers.
Telephones are of great importance to the disabled. I have been re-reading the National Innovation Centre's study of

the situation in Hull. The sample was small, but it gave a clear indication that the provision of telephones not only saves lives but also saves individuals from having to go into institutions. The survey showed clearly what many of us in the Post Office Engineering Union have been saying for a decade—that the provision of this service not only acts as a lifeline, or as an emergency service, but can also avoid the great isolation which is sometimes felt by disabled people, living alone or with one other person. The argument against the flashing emergency light is not that it might not be seen but that it is not enough, because the problem of the disabled person is not only the physical one of staying alive but the problem of isolation and loneliness.
Other services have also been neglected. I am concerned, as is the National Innovation Centre, with the problem of disabled students. In my constituency, disabled children, with the exception of one or two categories, are well provided for in schooling, but those who do well find it very difficult to go on to further education at either the college of further education or the university, because the architects who designed both buildings, which are modern, were more concerned about the look of the buildings than with their use by disabled students as well as other students.
It is becoming increasingly important to provide facilities in these centres for the disabled to take part in further education. There is no doubt that the importance of work for the disabled is that they should be able to use their minds. Very often, their disabilities debar them from working with their hands or acquiring manual dexterity. It is very important that their education should be as extensive as possible.
There is also the problem of access. in this context, I reiterate what others outside the House have said. In all our talk about stopping the motor car from going into city centres, let no town planner forget that it is most important for the disabled to be able to use transport to get into the cities. In solving the problem of the motor car in our cities, we must be careful not further to restrict the mobility of the disabled. The time has come for the Government to take mandatory powers to extend the yellow badge scheme, whereby disabled persons


receive special parking facilities. It is a scandal that in central London the local authorities are not adopting the scheme. It is also a scandal that there is still no clear guidance whether blind passengers are covered by the scheme. It should be possible for a driver carrying a blind passenger to stop his vehicle at a convenient point. It is nonsense to provide yellow badges for disabled drivers but not to take into account the needs of blind passengers.
The other thing which must be done is to provide work for not only the physically, but the mentally handicapped. Again, this is a problem in my constituency. It is wrong to provide schooling for these people up to the ages of 16, 17 or 18 and then to tell them that there is no chance of their being employed. We should not tell them that they face a lifetime with such a threat hanging over them. This is a political debate, which stems from the fact that the Government have chosen to give money to the wrong people. They have given it to the rich rather than the disabled.

9.30 p.m.

Mr. Alfred Morris: This is a deeply important debate for very large numbers of the most hard-pressed people in Britain today. In his speech the Under-Secretary said that the opening speech of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) was both admirable and robust. It was also a speech of transparent sincerity and compelling force. There have been many notable speeches from both sides of the House.
Uncharacteristically, because we all respect his sincerity and concern, the Under-Secretary was villainously unfair to The Times. He knows that the newspaper was seeking today to perform a public service. He referred to "big bangs" in his speech. His own contribution, because of its heavy party political overtones, was little more than a damp squib. The speech of the hon. Member for Canterbury (Mr. Crouch) was an object lesson to the Under-Secretary. The hon. Member carefully kept away from any party points. If every local authority had done as well as Canterbury in the past year, this motion would never have appeared on the Order Paper. The

Under-Secretary knows that very well. Like the Secretary of State, he also knows that our only concern is much to improve the general standard of services for the chronically sick and disabled. Our criticism is that while some local authorities have gone steadily forward, others have stood still. We want a general improvement throughout Britain. We want the services available locally to chronically sick and disabled people to be of a uniformly high standard.
The Under-Secretary never for one moment addressed himself to the Government's deplorable failure to find parliamentary time to debate any of the reports presented to the House under the Chronically Sick and Disabled Persons Act. He made no reference to the two reports which have been presented to the House under the terms of Section 22. Nor did he mention the reports which have been presented to us under the terms of Section 17. Instead of indulging in party points, he might have explained why this House is not entitled to debate extremely important documents presented to it by the Secretary of State. The Under-Secretary also said that it was easy to identify the physically handicapped. He went on to say that it is not so easy to identify the mentally handicapped and mentally ill.
My hon. Friend the Member for Woolwich, East (Mr. Mayhew) rightly reminded him that the Act is as applicaable to the mentally handicapped and mentally ill as it is to the physically handicapped and physically ill. If the Undersecretary is right, however, and it is so easy to identify the physically handicapped, why have so many local authorities failed to identify a much bigger proportion of the physically handicapped in their areas?
I feel I should inform the House about one point that has not been mentioned in our earlier debates on disablement. The Under-Secretary of State sought to lecture the House tonight on the statutory requirements vouchsafed by the Chronically Sick and Disabled Persons Act. May I now confide to him that Sir John Fiennes, who was the senior parliamentary draftsman to the present Government as he was to the previous Government, gave a great deal of his time and dedication to the fellowship of people who worked with me on the Act to ensure


that it had no defects in the duties it laid on local authorities or in any other respect. I prefer the expertise of Sir John to the viewpoint so hastily given today by the Under-Secretary of State.
The hon. Member for Newbury (Mr. Astor) made a distinguished contribution to the debate. He knows that the 1970 Act became law entirely without parliamentary animus and with Parliament's clear and unanimous intention that it would be implemented locally in the same atmosphere of co-operation. It was not for the Under-Secretary of State to try to inject party animus into the debate.
One of our colleagues is sadly missed today. I refer to my hon. Friend the Member for Eccles (Mr. Carter-Jones), who made such powerful contributions to our earlier debates. He is not with us because his wife is seriously ill. She is in hospital, and I know that the thoughts of right hon. and hon. Members on both sides of the House will be with my hon. Friend this evening. [HON. MEMBERS: "Hear, hear."] My hon. Friend asked me by telephone this afternoon to say that what the disabled need more than anything else is better assessment facilities to show what they can achieve. I am sure that the Under-Secretary of State will recognise that as an extremely important matter. Unfortunately, I can refer to my hon. Friend's point only briefly because of the extreme pressure on time.
Section 1 of the 1970 Act is the master key to the main problem. It lays a duty, not a discretion, on local authorities to inform themselves of the numbers and needs of handicapped people in their areas. That is an entirely new duty laid on local authorities. Yet there are still about 750,000 unidentified cases of very severe disablement in Britain today. The report from Social Policy Research, commissioned by the National Fund for Research into Crippling Diseases, adds greatly to our knowledge about the identification of severely disabled people by local authorities and the services provided locally for them.
I pay tribute to those who prepared the report for Social Policy Research. The voluntary organisations have played their full part in seeking to ensure the full and humane implementation of the Act. As

the House knows, there has been an important report today from the Central Council for the Disabled.
There are those who have sought to criticise some of the figures which appear in the report. But it is not for the Government to criticise those who seek to inform this House of the comparative performances of local authorities. My hon. Friend the Member for Stoke-on-Trent, South last year pressed the Prime Minister to present us with authoritative information on the implementation of the Act by local authorities. The Prime Minister appeared to say that it would be misleading to present the House with such information. His attitude appeared to be one of "not before the children". He is not alone in appearing to feel that we should be silent about the differences in local provision for the severely disabled. I would say to the Secretary of State, as to his ministerial colleagues at the Ministry, that they must at the earliest possible date give us definitive information on how local authorities throughout the country are meeting their new responsibilities under the Act.
We have had enormous help from young people. If I were a member of the younger generation, I should be heartily sick of the bad publicity afforded them by much of the Press. The fact is that tens of thousands of young people in every part of the country have assisted local authorities to identify the disabled under the provisions of the Act.
The Under-Secretary of State wrote to me to say that he had emphasised to one county authority that Section 1 of the Act lays a duty—not a discretion—upon local authorities; he wrote to the Clerk of Cornwall County Council asking him to bring it to the attention of the social services committee at its next meeting with a view to considering what further steps should be taken to discharge that authority's statutory duty. He went on to say that he would be keeping a personal eye on developments. If the hon. Gentleman can write in such terms to Cornwall, why not to authorities which are shown by the National Fund report to be defaulting authorities under the Act? If the Central Council for the Disabled can identify defaulting authorities, why is it not possible for the Department of State to identify them? The


Under-Secretary of State must recognise that he has the rôle of leadership in this field. It is not for us—we are not in executive Government—to ensure full implementation of this legislation. I said that we accept the hon. Gentleman's sincerity. We hope that he will now show that he is not prepared for the unanimous decision of this House to be cast aside by anyone in local government.
My view has always been that we should praise the good, not condemn the bad. I note from the report commissioned by the National Fund that one-third of authorities are what might be called "bad" authorities. That implies that two-thirds of the local authorities may be called "good" authorities. The Under-Secretary must recognise, like his hon. Friend the Member for Newbury and other of his hon. Friends, that I have always said that we must praise the good rather than condemn the bad. Nevertheless, neither must we condemn those who seek to show the House that many local authorities are not fulfilling their statutory responsibilities.
I should like to tell the House a tale of two children. They are both very severely disabled, and they live only 25 miles apart. Gillian is 13 years old. She has to wear an artificial leg, and has badly deformed arms. She is a pupil at the Telford School for physically handicapped children. She has had every possible help from Manchester's social services department. She has already received around £600 in aid, including a bathroom conversion, with a £250 electronically-operated toilet and special taps for the wash basin and bath. All her travelling expenses to and from hospital, including visits to a hospital in the London area, have been paid for by the local authority. Her mother says:
There has been an ambulance to take me to the train and one to meet me at the other end. It has never cost me a penny.
The other child is Sandra. She lives in the area of Lancashire County Council. She was born without legs, a short right arm, badly deformed fingers and deformed hips. She formerly went to a special school at Standish, near Wigan, but now attends an ordinary mixed day school near her home. Her mother, a 32-year-old part-time nurse, says:
Over the years, I have had many visits from a local authority occupational therapist,

at which help has been promised, but nothing has ever come of it.
Sandra's mother is anxious to have a special hoist to enable her daughter to get into and out of the bath. She says:
I have been promised one, but nothing ever happens.
She also says that, over the years, she and her husband have spent at least £200 out of their own pockets on travelling with Sandra to hospitals around the country and on overnight accommodation:
I have tried hospital almoners, social workers, the Social Services Department, just about everyone, but I have not been able to get a halfpenny back.
It is intolerable that disabled people should be treated so differently by different local authorities. Why should these two children be treated so differently by Manchester County Borough and Lancashire County Council? I hope that the Under-Secretary will emphasise tonight that there is no question of any of the Government's £3 million fund for congenitally handicapped children being used to prop up the local authorities which are failing to meet their responsibilities under the Chronically Sick and Disabled Persons Act. He must make that clear beyond a scintilla of doubt. If he does not, then he is letting the bad authorities off the hook and penalising those which are fully implementing the Act.
There is a great deal of meanness in these matters. My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) put to me earlier this evening the case of his constituent Mr. John Graham Kelly. To quote from a statement by the medical practitioner for and on behalf of the Attendance Allowance Board:
With regard to the day conditions, I accept that Mr. Kelly requires frequent attention throughout the day in connection with his bodily functions.
With regard to the night conditions, I note from the medical report dated 24th November 1972 that Mrs. Kelly has to get up to help her husband to go to the toilet or get a drink and this occurs about 3–4 times a week. However, the need for urination could be reduced by omitting the drinking and I do not accept that he requires prolonged or repeated attention during the night in connection with his bodily functions. So far as supervision is concerned, I note that he cannot get out of bed and there is, therefore, no propensity to danger during the night.


That is a very harsh statement. Does the Minister think that Mr. Kelly should be denied a drink so that he might fit in neatly with some very strict rules of entitlement?
We are beaten by time tonight. I had meant to refer at length to what has not been done in research and development. I hope that the Under-Secretary will accept a number of documents from the National Fund for Research into Crippling Diseases which I intend to send him. Those documents will show that the second report presented under Section 22 of the Act is even more unsatisfactory than the first. I ask the hon. Gentleman to consult his right hon. and hon. Friends about the need for a full-ranging debate on research and development at the earliest possible date.
As many of my hon. Friends pointed out, the employment problems of severely disabled people are scandalous. There is now over 13 per cent. unemployment amongst employable disabled people throughout Britain, and in the North-West the figure is over 15 per cent.
I had meant to refer to Sections 25 and 27 of the Act which affect deaf-blind, autistic and dyslectic children, but time is not available. All that we on this side want—and I am sure that our view is shared by many on the Government benches—is to end the serene satisfaction in public authorities by which many hundreds of thousands of disabled people are still oppressed. My measure had the single aim of extending the welfare, improving the status and enhancing the dignity of the long-term sick and disabled. That was our aim then. It is our aim now. We feel that our motion is couched in very moderate terms and that there is no reason whatever why it should be opposed.

9.52 p.m.

Mr. Alison: With permission, Mr. Speaker, I should like to try to wind up this debate in the tone which the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) adopted and to deal with as many points as the few minutes at my disposal will allow.
I associate myself and my right hon. Friends—all of us on the Government side—with the expressions of regret at the absence of the hon. Member for Eccles

(Mr. Carter-Jones). We agree that few people have taken such a long-term and self-sacrificing interest in this field as has the hon. Member, particularly in connection with POSSUM, with which he has been so intimately associated.
Against the background of the continuing rather sweeping accusations of incompetence or irresponsibility on the part of local authorities—and the hon. Member himself cited a case from Lancashire—one must once again emphasise the fact that it is quite misleading on the basis of the figures of the Institute of Municipal Treasurers published in The Times today to draw a general conclusion about how local authorities are doing. My right hon. Friend has taken steps to ensure that figures are available —they will be available later this year and the House will be informed of them —but it is not possible in the meantime, in the absence of various relevant factors about the situation, to make meaningful accusations of shortcomings and irresponsibility as so many hon. Members have sought to do.
The hon. Member for Wythenshawe gave a Lancashire example. My right hon. Friend was in the county of Lancaster today. He talked to the Director of Social Services, who was able to tell him that, for example, in respect of adaptations of homes of the handicapped, expenditure in 1971–72, our first full year in office, was £34,000. The estimate for the year 1973–74 is no less than £159,000. This represents a five-fold increase in that county.
Again, the figures published in The Times today inevitably exclude a whole range of services provided, for example, for the mentally handicapped, in whom many hon. and right hon. Members on both sides take a very great interest. I note that the hon. Member for Stoke-on-Trent, South (Mr. Ashley) made no reference to the services for the mentally handicapped or the mentally ill which either the central Government or local government are providing. These figures do not appear in The Times figures today simply because they do not appear in that section of statistics about a selected group of the chronically sick and disabled to whom the Act applies. But the mentally handicapped are at least as much in need, and a great deal is being done for them by local authorities.
Huge steps have been taken to improve the volume of home nursing and home helps. The 18½ per cent. increase in the number of home helps available as a result of the steps taken by this Government in the past three years would not itself have been reflected in the IMTA figures about which so much time has been spent in debate. In fact they are extremely relevant to the needs of the disabled.
How can we take account of the extra cost involved in deploying generic social workers to look after all sorts of conditions of people, some disabled and some not disabled? It is virtually impossible to make an allocation of the amount spent in this connection on the disabled, and practically any selection of figures about what the local authorities are doing is bound to be misleading.
Local authorities are singled out for criticism time and again. But anyone looking at the facts will find that they have changed the basis of their accounting since the figures were first put forward or that there is a whole range of other services which no one has noticed that they are performing. As I said just now, we shall let the hon. Member for Wythenshawe have details. They will become available and will be published this summer as soon as my right hon. Friend receives and collates them. Only then will it be fair to make true comparisons.
I now touch briefly on one or two of the other points raised in the debate. The hon. Member for Willesden, West (Mr. Pavitt) mentioned deafness. I want to stress our interest in this subject not only because of the hon. Gentleman's own interest and disability but because of that of the hon. Member for Stoke-on-Trent, South, who opened the debate so impressively. I welcome the point made by the

hon. Member for Willesden, West. I know of his interest in Section 24 and I echo his tribute to the hon. Member for Stoke-on-Trent, South. I assure both hon. Members that my right hon. Friend and I are studying very carefully the Medical Research Council report. This is not just an empty promise. As evidence of that my Department is now engaged in a overall review of services for deaf people in which I am taking a personal interest on the direct instructions of my right hon. Friend who himself is deeply concerned with this disability.

The problems are enormous, stemming largely from shortages of trained staff. But although we have a long road to travel to bring services to the point that we should like to see them, we are determined to identify the gaps as precisely as possible and to work out a comprehensive plan for filling them.

Having listened to the hon. Member for Stoke-on-Trent, South, and to the hon. Member for Wythenshawe, the terms of the motion still strike us as being a ludicrous exercise in failing to perceive the real needs of the disabled. The total implementation of the Act called for by the motion is a political gimmick. It does no good to the true needs of the disabled against the perspective of a steady increase across the board in financial and other measures that this Government have brought forward. They are increases and improvements which are without precedent in the scale that has been achieved in so short a time.

Without hesitation, I ask my right hon. and hon. Friends to reject the terms of the motion.

Question put:—

The House divided: Ayes 260, Noes 285.

Division No. 100.]
AYES
[10.0 p.m.


Abse, Leo
Blenkinsop, Arthur
Carter, Ray (Birmingh'm, Northfield)


Allaun, Frank (Salford, E.)
Boardman, H. (Leigh)
Castle, Rt. Hn. Barbara


Archer, Peter (Rowley Regis)
Booth, Albert
Clark, David (Colne Valley)


Ashley, Jack
Bottomley, Rt. Hn. Arthur
Cocks, Michael (Bristol, S.)


Ashton, Joe
Boyden, James (Bishop Auckland)
Cohen, Stanley


Atkinson, Norman
Bradley, Tom
Coleman, Donald


Bagier, Gordon A. T.
Broughton, Sir Alfred
Concannon, J. D.


Barnes, Michael
Brown, Robert C. (N'c'tle-u-Tyne, W.)
Conian, Bernard


Barnett, Guy (Greenwich)
Brown, Hugh D. (G'gow, Provan)
Corbet, Mrs. Freda


Barnett, Joel (Heywood and Royton)
Brown, Ronald (Shoreditch &amp; F'bury)
Cox, Thomas (Wandsworth, C.)


Beaney, Alan
Buchan, Norman
Crawshaw, Richard


Benn, Rt. Hn. Anthony Wedgwood
Buchanan, Richard (G'gow, Sp'burn)
Cronin, John


Bennett, James (Glasgow, Bridgeton)
Butler, Mrs. Joyce (Wood Green)
Crosland, Rt. Hn. Anthony


Bidwell, Sydney
Cant, R. B.
Crossman, Rt. Hn. Richard


Bishop, E. S.
Carmichael, Neil
Cunningham, G. (Islington, S.W.)




Cunningham, Or. J. A. (Whitehaven)
John, Brynmor
Panned, Fit. Hn. Charles


Dalyell, Tam
Johnson, Carol (Lewisham, S.)
Pardoe, John


Davidson, Arthur
Johnson, James (K'ston-on-Hull, W.)
Parker, John (Dagenham)


Davies, Denzil (Llanelly)
Johnson, Walter (Derby, S.)
Parry, Robert (Liverpool, Exchange)


Davies, G. Elfed (Rhondda, E.)
Jones, Barry (Flint, E.)
Pavitt, Laurie


Davies Ifor (Gower)
Jones, Dan (Burnley)
Peart, Rt. Hn. Fred


Davis Clinton (Hackney, C.)
Jones,Rt.Hn.SirElwyn(W.Ham,S.)
Pendry, Tom


Davis, Terry (Bromsgrove)
Jones, T. Alec (Rhondda, W.)
Perry, Ernest G.


Deakins, Eric
Judd, Frank
Prescott, John


de Freitas, Rt. Hn. Sir Geoffrey
Kaufman, Gerald
Price, William (Rugby)


Delargy Hugh
Kelley, Richard
Probert, Arthur


Dell, Rt. Hn. Edmund
Kerr, Russell
Radice, Giles


Dempsey James
Kinnock, Neil
Reed, D. (Sedgefield)


Doig Peter
Lambie, David
Rees, Merlyn (Leeds, S.)


Dormand J.D.
Lamborn, Harry
Rhodes, Geoffrey


Douglas, Dick (Stirlingshire, E.)
Lamond, James
Richard, Ivor


Douglas-Mann Bruce
Latham, Arthur
Roberts, Albert (Normanton)


Driberg Tom
Lawson, George
Roberts,Rt.Hn.Goronwy(Caernarvon)


Duffy A. E. P.
Leadbitter, Ted
Robertson, John (Paisley)


Dunn, James A.
Lee, Rt. Hn. Frederick
Roderick, Caerwyn E.(Brc'n&amp;R'dnor)


Dunnett, Jack
Leonard, Dick
Rodgers, William (Stockton-on-Tees)


Eadie, Alex.
Lestor, Miss Joan
Rowlands, Ted


Edelman Maurice
Lewis, Arthur (W. Ham, N.)l
Sandelson, Neville


Edwards, Robert (Bilston)
Lewis, Ron (Carlisle)
Sheldon, Robert (Ashton-under-Lyne


Edwards, William (Merioneth)
Lipton, Marcus
Shore, Rt. Hn. Peter (Stepney)


Ellis, Tom
Lomas, Kenneth
Short, Rt.Hn.Edward (N'c'tle-u-Tyne)


English Michael
Loughlin, Charles
Short, Mrs. Renée (W'hampton.N.E.)


Evans Fred
Lyon, Alexander W. (York)
Silkin, Rt. Hn. John (Deptford)


Ewing, Harry
Lyons, Edward (Bradford, E.)
Silkin, Hn. S. C. (Dulwich)


Faulds, andrew
Mabon, Dr. J. Dickson
Sillars, James


Fernyhough, Rt. Hn. E
McBride, Neil
Silverman, Julius


Fernyhough, Rt. Hn. E.
McCartney, Hugh
Skinner, Dennis


Fitch, Alan (Wigan)
McElhone, Frank
Smith, John (Lanarkshire, N.)


Fletcher, Ted (Darlinton)
McGuire, Michel
Spearing, Nigel


Ford, Ben
Machin, George
Spriggs, Leslie


Forrester, John

Stallard, A. W.


Fraser, John (Norwood)
Mackenize, Gregor
Steel, David


Freeson, Reginald
Mackie, John
Steel, David


Galpern, Sir Myer
Mackintosh, John P.
Stewart, Rt. Hn. Michael


Garrett, W. E.
McMillan, Tom(Glasgow, C.)
Stoddart, David (Swindon)


Gilbert, Dr. John
Mc Namera, J. Kevin
Stonehouse, Rt. Hn. John


Ginsburg, David (Dewsbury)
Mahon, Simon (Bootle)
Strang, Gavin


Golding, john
Mallalieu, J. P. W. (Huddersfield, E.)
Strauss, Rt. Hn. G. R.


Gourlay, Harry
Marks, Kenneth
Summerskill, Hn. Dr. Shirley



Marsden, F.



Grant, George (Morpeth)
Mason, Rt. Hn. Roy
Taverne, Dick


Grant, John D. (Islington, E.)
Mayhew, Christopher
Thomas.Rt.Hn.George (Cardiff.W.)


Griffiths, Eddie (Brighside)
Meacher, Michael
Thomas, Jeffrey (Abertillery)


Griffiths, Will (Exchange)
Mellish, Rt. Hn. Robert
Tinn, James


Grimond, Rt Hn. J.
Mendelson, John
Tope, Graham


Hamilton, William (Fife, W.)

Torney, Tom


Hamling, William
Mikardo, lan
Tuck, Raphael


Hannan, William (G'gow, Maryhill)
Millan, Bruce
Urwin, T.W.


Hardy, Peter
Miller, Dr. M. S
Varley, Eric G.


Harper, Joseph
Milne, Edward
Wainwright, Edwin


Harrison Walter (Wakefield)
Mitchell, R. C. (S'hampton, Itchen)
Walden, Brian (B-m'ham, All Saints)


Hart Rt'Hn Judith
Molloy, William
Walker, Harold (Doncaster)


Hattersley, Roy
Morris, Alfred (Wythenshawe)
Wallace, George


Healey Rt' Hn Denis
Morris, Charles R. (Openshaw)
Watkins, David


Heffer, Eric S.
Morris, Rt. Hn. John (Aberavon)
Weitzman, David


Hilton, W. S.
Moyle, Roland
Wellbeloved, James


Hooson Emlyn
Mulley, Rt. Hn. Frederick
Wells, William (Walsall, N.)


Horam John
Murray, Ronald King
White, James (Glasgow, Pollok)


Houghton, Rt. Hn. Douglas
Oakes, Gordon
Whitehead, Phillip


Howell, Denis (Small Heath)
Ogden, Eric
Whitlock, William


Huckfield, Leslie
O'Halloran, Michael
Willey, Rt. Hn. Frederick


Hughes, Mark (Durham)
O'Malley, Brian
Williams, Alan (Swansea, W.)


Hughes, Robert (Aberdeen, N.)
Oram, Bert
Williams, W. T. (Warrington)


Hughes, Roy (Newport)
Orbach, Maurice
Wilson, Alexander (Hamilton)


Hunter, Adam
Orme, Stanley
Wilson, William (Coventry, S.)


Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Oswald, Thomas
Woof, Robert


Janner, Greville
Owen, Dr. David (Plymouth, Sutton)
TELLERS FOR THE AYES:


Jay, Rt. Hn. Douglas
Padley, Walter
Mr. Ernest Armstrong and


Jenkins, Rt. Hn. Roy (Stechford)
Paget, R. T.
Mr. James Hamilton.


Jenkins, Hugh (Putney)
Palmer, Arthur





NOES


Adley, Robert
Baker, W. H. K. (Banff)
Berry, Hn. Anthony


Alison, Michael (Barkston Ash)
Balniel, Rt. Hn. Lord
Biffen, John


Allason, James (Hemel Hempstead)
Barber, Rt. Hn. Anthony
Blaker, Peter


Archer, Jeffrey (Louth)
Batsford, Brian
Boardman, Tom (Leicester, S.W.)


Astor, John
Beamish, Col. Sir Tufton
Body, Richard


Atkins, Humphrey
Bell, Ronald
Boscawen, Hn. Robert


Awdry, Daniel
Bennett, Dr. Reginald (Gosport)
Bossom, Sir Clive


Baker, Kenneth (St. Marylebone)
Benyon, W.
Bowden, Andrew







Braine, Sir Bernard
Hastings, Stephen
Onslow, Cranley


Bray, Ronald
Havers, Michael
Oppenheim, Mrs. Sally


Brewis, John
Hawkins, Paul
Owen, Idris (Stockporl, N.)


Brinton, Sir Tatton
Hayhoe, Barney
Page, Rt. Hn. Graham (Crosby)


Brocklebank-Fowler, Christopher
Heselline, Michael
Page, John (Harrow, W.)


Brown, Sir Edward (Bath)
Hicks, Robert
Parkinson, Cecil


Bruce-Gardyne, J.
Higgins, Terence L.
Peel, John


Bryan Sir Paul
Hiley, Joseph
Percival, Ian


Buchanan-Smith, Alick (Angus.N&amp;M)
Hill, John E. B. (Norfolk, S.)
Peyton, Rt. Hn. John


Buck Antony
Holland, Philip
Pike, Miss Mervyn,


Bullus, Sir Eric
Holt, Miss Mary
Pink, R. Bonner


Burden F. A.
Hordern, Peter
Pounder, Rafton


Butler, Adam (Bosworth)
Hornby, Richard
Powell, Rt. Hn. J. Enoch


Campbell. Rt. Hn. G. (Moray &amp; Nairn) 
Howe, Hn. Sir Geoffrey (Reigate)
Price, David (Eastleigh)


Carlisle Mark
Howell, Ralph (Norfolk, N.)
prior, Rt. Hn. J. M. L.


Carr Rt. Hn. Robert
Hunt, John
Proudfoot, Wilfred


Cary Sir Robert
Hutchison, Michael Clark
Pym, Rt. Hn. Francis


Channon Paul
Iremonger, T. L.
Quennell, Miss J. M.


Chapman, Sydney
Irvine, Bryant, T. L.
Raison, Timothy


Chichester-Clark R.
James, David
Ramsden, Rt. Hn. James


Churchill, W. S.
Jessel, Toby
Rawlinson, Rt. Hn. Sir Peter


Clark, William (Surrey, E.)
Johnson Smith, G. (E. Grinstead)
Redmond, Robert


Clark, Kenneth(Rushcliffe)
Jones, Arthur (Northants, s.)
Reed, Laurance (Bolton, E.)


Cockeram Eric
Jopling, Michael
Rees, Peter (Dover)


Cooke Robert
Joseph, Rt. Hn. Sir Keith
Rees-Davies, W. R.


Coombs Derek
Kaberry, Sir Donald
Renton, Rt. Hn. Sir David


Cooper, A. E.
Kellett-Bowman, Mrs. Elaine
Rhys Williams, Sir Brandon


Cordle, John
Kershaw, Anthony
Ridley, Hn. Nicholas


Corfield, Rt, Hn. Sir Frederick
Kimball, Marcus
Ridsdale, Julian



King, Evelyn (Dorset, S.)



Cormack, Patrick
King, Tom (Bridgwater)
Rippon, Rt. Hn. Geoffrey


Costain, A. P.
Kinsey, J. R.
Roberts, Michael (Cardiff, N.)


Crowder, F. P.
Kirk, Peter
Roberts, Wyn (Conway)


d'Avigdor-Goldsmid, Sir Henry
Kitson, Timothy
Rossi, Hugh (Hornsey)


d'Avigdor-Goldsmid, Maj.-Gen. Jack
Knight, Mrs. Jill
Rost, Peter


Dean, Paul
Knox, David
Royle, Anthony


Deedes, Rt. Hn. W.F.
Lambton, Lord
Russell, Sir Ronald


Digby, Simon Wingfield
Lamont, Norman
St. John-Stevas, Norman


Dixon, Piers
Lane, David
Scott, Nicholas


Douglas-Home, Rt. Hn. Sir Alec
Langford-Holt Sir John
Shaw, Michael (Sc'b'gh&amp; Whitby)


Drayson, G.B.
Le Marchant, Spencer
Shelton, William (Clapham)


du Cann, Rt. Hn. Edward
Lewis, Kenneth (Rutland)
Shersby, Michael


Dykes, Hugh
Lloyd, Ian (P'tsm'th, Langstone)
Simeons, Charles


Eden, Rt. Hn. Sir John
Loveridge, John
Sinclair, Sir George


Edwards, Nicholas (Pembroke)
Luce, R. N.
Skeet, T. H. H.


Elliot, Capt. Walter (Carshalton)
McAdden Sir Stephen
Smith, Dudley (W'wick &amp; L'mington)


Elliott, R.W. (N'c'tle-upon-Tyne, N.)
MacArthur Ian
Soret, Harold


Emery, Peter
McCrindle, R. A.
Speed, Keith


Eyre, Reginald
McLaren, Martin
Spence, John


Farr, John
Maclean Sir Fitzroy
Sproat, lain


Fell, Anthony
McMaster, Stanley
Stainton, Keith


Fenner, Mrs. Peggy
Macmillan, Rt.Hn.Maurice(Farnham)
Stanbrook, Ivor


Fidler, Michael
McNair-Wilson Michael
Stewart-Smith, Geoffrey (Belper)


Fisher, Nigel (Surbiton)
McNair-Wilson, Patrick (New Forest)
Stodart, Anthony (Edinburgh, W.)


Fletcher-Cooke, Charles
Maddan, Martin
Stoddart-Scott, Col. Sir M.


Fookes, Miss Janet
Madel David
Stokes, John


Fortescue, Tim
Marples, Rt. Hn. Ernest
Stuttaford, Dr. Tom


Foster, Sir John
Marten Neil
Sutcliffe, John


Fowler, Norman
Mather' Carol
Tapsell, Peter


Fox, Marcus
Maude Angus
Taylor, Edward M.(G'gow, Cathcart)


Fraser, Rt.Hn.Hugh(St'fford &amp; Stone)
Maudling, Rt. Hn. Reginald
Taylor, Frank (Moss Side)


Fry, Peter
Mawby, Ray
Taylor, Robert (Croydon, N.W.)


Gardner Edward
Maxwell-Hyslop R. J.
Tebbit, Norman


Gibson-Watt, David
Meyer, Sir Anthony
Temple, John M.


Glyn, Dr. Alan
Mills, Peter (Torrington)
Thatcher, Rt. Hn. Mrs. Margaret


Goodhart, Philip
Miscampbell, Norman
Thomas, John Stradling (Monmouth)


Goodhew, Victor
Mitchell,Lt.-Col.C.(Aberdeenshire,W)
Thomas, Rt. Hn. Peter (Hendon, S.)


Gorst, John
Mitchell, David (Basingstoke)
Thompson, Sir Richard (Croydon, S.)


Gower Raymond
Moate, Roger
Tilney, John


Grant, Anthony (Harrow, C.)
Money, Ernie
Trafford, Dr. Anthony


Gray, Hamish
Monks, Mrs. Connie
Trew, Peter


Green, Alan
Monro, Hector
Turton, Rt. Hn. Sir Robin


Grieve Percy
Montgomery, Fergus
van Straubenzee, W. R.


Griffiths, Eldon (Bury St. Edmunds)
More, Jasper
Vaughan, Dr. Gerard


Grylls, Michael
Morgan, Geraint (Denbigh)
Vickers, Dame Joan


Gummer, J. Selwyn
Morgan-Giles, Rear-Adm.
Waddington, David


Gurden, Harold
Morrison, Charles
Walder, David (Clitheroe


Hall Miss Joan (Keighley)
Mudd, David
Walker, Rt. Hn. Peter (Worcester)


Hall, John (Wycombe)
Murton, Oscar
Walker-Smith. Rt. Hn. Sir Derek


Hall Davis, A. G. F.
Nabarro, Sir Gerald
Walters, Dennis


Hamilton, Michael (Salisbury)
Neave, Airey
Ward, Dame Irene


Hannam, John (Exeter)
Nicholls, Sir Harmar
Wells, John (Maidstone)


Harrison, Brian (Maldon)
Noble, Rt. Hn. Michael
White, Roger (Gravesend)


Harrison, Col. Sir Harwood (Eye)
Normanton, Tom
Wiggin, Jerry


Haselhurst, Alan
Nott, John
Wilkinson, John







Winterton, Nicholas
Woodnutt, Mark
TELLERS FOR THE NOES:


Wolrige-Gordon, Patrick
Worsley, Marcus
Mr. Waller Clegg and


Wood, Rt. Hn. Richard
Wylie, Rt. Hn. N. R.
Mr. Bernard Weatherill.


Woodhouse, Hn. Christopher
Younger, Hn. George

Question accordingly negatived.

Orders of the Day — CINEMATOGRAPH FILMS (LEVY)

10.13 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): I beg to move,
That the Cinematograph Films (Collection of Levy) (Amendment No. 3) Regulations 1973, a draft of which was laid before this House on 26th March, be approved.
These regulations are entirely consequential, following the application of VAT to the price of admission to cinemas. It happens that the levy which cinema exhibitors are required to pay to the British Film Fund is geared, as the regulations stand at present, to the full price of admission. If that price goes up because of VAT, the levy would go up, too, which is a consequence not intended. The amending regulations before the House will maintain the status quo.
The regulations are made by virtue of Section 2 of the Cinematograph Films Act 1957, the operation of which was extended for 10 years by the Films Act 1970. The Act provides for the imposition of a levy on exhibitors of cinematograph films, and for the distribution of the proceeds of that levy, with minor exceptions, to makers of British films.
Section 2 of the 1957 Act requires the Department of Trade and Industry to make regulations prescribing the rate and method of collection of the levy, and to consult the Cinematograph Films Council before doing so. This has been done, and all sides agree on the need for these regulations.
Perhaps it will assist the House if I give an illustration of how, if these regulations were not passed, an anomaly would arise. At present, the amount of levy payable on a seat price of 40p is 3·6lp, leaving the net amount retained by the exhibitor at 36·39p. With VAT added, the burden of levy on the exhibitor would change. The price of the seat becomes 44p, but VAT, and levy on this higher price, would together take 8·05p, leaving the exhibitor with 35·95p. To retain his same net price after VAT on the sample admission price of 40p the exhibitor would have to raise his total

price by between 11 and 11½ per cent., which nobody wants to see happen.
I had some inquiries made of the principal companies engaged in cinema exhibition throughout Great Britain, not just of the two major circuits, and I am pleased to be able to say that, no doubt in anticipation of these amending regulations being passed, no exhibitor has put his prices up by anything like this higher amount and that, taken overall, the increases are less than 10 per cent. Moreover, none of these companies is raising the special prices applicable to old-age pensioners and children's cinema clubs. In these cases the exhibitors will be paying the VAT themselves.
VAT is a tax unconnected with the film levy, and it is right that the levy should continue to be collected uninfluenced by VAT. For that reason amending regulations have been drawn up so that, for levy purposes, the price of the seat will exclude the amount payable as VAT, and the amount which the exhibitor has to pay to the levy will be the same as it is now.
There is a further point which relates to the special provision in the regulations designed to help cinemas with particularly low takings. If the takings are below £500 per week no levy is payable. Furthermore, in order to afford some relief to cinemas whose box office takings vary widely according to the season of the year, the regulations provide that levy is payable only if both takings in the relevant week and average takings from the beginning of the levy year exceed £500.
If the regulations were not made, the addition of VAT to seat prices in these cinemas for the purposes of levy would put some of them above the minimum laid down so that they would be liable to pay the levy. The amendment accordingly provides that, in the case of the low-takings cinemas also, VAT shall be left out of account in computing the amount of weekly takings for purposes of levy liability. These regulations will come into operation the day after they are made, which means, subject to the decision yet to be made in the other place, 13th April. Hon. Members will see from paragraph 3 of the amendment that it applies to each levy period ending after that date. Levy periods last for four


weeks and the current period ends on 14th April-next Saturday. The arrangement will thus be effective from the introduction of VAT and some very awkward levy computations which would otherwise have been necessary will have been avoided.
That is the reason for my seeking the indulgence of the House in agreeing to consider these measures at short notice and I ask the House to approve the regulations.

10.18 p.m.

Mr. Roy Mason: The regulations in themselves are not controversial but the background to their necessity certainly is. They give a slight concession to the exhibitors which has been sought by all concerned in the industry -the Cinematograph Exhibitors Association, the Association of Independent Cinemas, the Kinematograph Renters Society, the Film Producers Association and finally approved by the Cinematograph Films Council. But if I understand the proposal aright, it is to relieve the cinema exhibitors from the obligation to pay extra amounts of Eady levy when VAT increases the gross price of a seat. So, what was feared in the industry-'hat there was to be a tax on top of another tax-is avoided and therefore value added tax is deducted before the Eady levy is computed.
For the information of the House the Eady levy is a levy at the rate of one-ninth of the excess of any seat price over 7½p. This goes to the British Film Fund, which decides how it shall be apportioned to the makers of British films. I should like the Minister to tell us how much levy was collected during the calendar year 1972, or, if the figures are available, up to the end of March 1973-because value added tax at 10 per cent. and the resultant price increases for admission mean an inevitable fall in the number of admissions. The levy figures of 1972 or 1972–73 should provide us with a useful yardstick. Some cinemas now contributing to the levy fund might, with higher prices and much lower admissions, drop into the non-contributory sector.
Secondly, the Government reduced the entertainments tax on cinemas as a result of the industry's being prepared to help fund British film production out of its own takings. That is the history of the 

Eady levy. But now the Government are slapping another form of entertainment duty on the cinemas in the guise of value added tax. I hope that the Minister can tell us why.
Thirdly, my greatest concern is that, having had the full value added tax of 10 per cent. thrust upon it, the film industry will-and this has already been reflected in higher seat prices, contrary to what the Minister says-be badly shaken. Whether the price of cinema seats increases across the board or only in the higher price range, the result is bound to be lower admissions. With lower admissions, the attraction of film production will be lessened, and the City and investors will shy away.
The situation is aggravated by the increase of production costs by at least 4 per cent. because of VAT. In a few months' time the industry may well be struggling for finance. Admissions are already declining.

Mr. Nicholas Ridley: The right hon. Gentleman has just spoken of costs going up by 4 per cent. Surely the input tax would be deductible from that, as would selective employment tax and purchase tax, in so far as the industry paid it. Therefore, I do not think that the cost of cinema seats should increase by anything like 10 per cent.

Mr. Mason: The hon. Gentleman has been involved. He must realise that the cinemas have not incurred purchase tax, and SET is negligible for the few people they employ per cinema seat. Therefore, it is likely that there will be an increase of up to 10 per cent. in the price of cinema seats. Already in the London circuit it has increased by an average of 8 per cent. to 8½ per cent.
In 1972 admissions declined by 18,750,000 people. In spite of a previous price increase, owing to rising costs, the gross takings were down as well. We know from the Eady levy returns that 836 cinemas take less than £500 a week, and therefore do not pay the levy, and that 142 cinemas take between £500 and £700 a week.
Because of the regulations, the Eady levy being computed on the old basis, most of the cinemas will still not qualify for levy payments. But, as the Minister


and the whole industry knows, these cinemas are in the area of doubtful profitability, and any price increase will have a disastrous effect upon their future.
Nearly a thousand cinemas could be in danger of closing as a result of the 10 per cent. value added tax. The tax is bound to force the pace of run-down in the British film industry. Seventy-seven cinemas closed in 1971, and if the 10 per cent. imposition is put on across the board it is bound to hasten that process.
What of the social implications? The thousand cinemas struggling to stay alive are not in the West End or the London circuit. By and large they are located in rural, suburban and less affluent areas. If they close, only undesirable adverse social consequences can result. I hope that the Minister will bear that aspect in mind as well.
If the United Kingdom film market declines, as I fear it will, finance for British film production will be more difficult to obtain. The result will be fewer films or cheaper and less attractive films, which in turn will also jeopardise our export market. I should therefore like to know what estimate the Minister has made of the effect of a 10 per cent. value added tax on the future of the industry, on the possibility of cinema closures, on work in the studios and on the unemployment in the industry that will result. In this regard I hope that he can assure us that he will constantly survey the trend and that if it shows a serious closure cycle, with its consequent repercussions on studio work and film finance, he will not hesitate to review the 10 per cent. rate with a view to its abolition or drastic reduction.
I cannot understand why the Government seem to hate the film industry so much and seem bent on killing it off. No other Common Market country imposes 10 per cent. VAT on its film industry. According to the figures of the Film Producers Association, Denmark has a rate of 7 per cent. but by 1975 is to have zero rating; France is proposing a 7·5 per cent. rate, the same as for books, but this has not yet been accepted; Belgium has 6 per cent.; Italy has 6 per cent. and that goes for books and newspapers; Ireland has 5·25 per cent., and the same as for books; Ger-

many has 5·5 per cent., the same as for books and newspapers. Why do we have a 10 per cent. rate on our own industry which has to compete with all those countries in production and in export sales? Secondly, in most of those countries books and newspapers have a rate similar to that for films, and that should be so in the United Kingdom.
Finally, I draw attention to the Government's attitude to theatres as compared with cinemas. Last year, in reply to requests for VAT concessions for theatres, the Chancellor of the Exchequer said:
The Arts Council, in calculating the level of subsidy required by the various institutions it supports, will decide after April, 1973, whether any additional help is needed. When VAT is introduced purchase tax and SET will be abolished, and it will then be for individual managements to decide whether they need to raise their charges … the Government will make special supplementary provision during 1973 for the Arts Council. This in turn will enable the Arts Council to make special provision for the various institutions before the end of the financial year."—[OFFICIAL REPORT, 11th May 1972; Vol. 836, c. 1685.]
That indicates a possible subsidy to theatres if VAT involves material injury for them.
The Government are guilty of double standards. They are imposing a full VAT burden on the cinemas and on films while offering a favourable outlook to the theatres. This is the first time that we have had an opportunity to debate the introduction of VAT on the film industry. Although it is late—both the hour and the debate—and my remarks have been brief, I think that I have covered most of the matters that are causing the industry anxiety and concern. I hope that the Minister will take a little time and some care to study what I have said and that he will take steps to alleviate the worries that I have expressed. I hope that he will do that when he replies to the debate before we allow the regulations to go through.

10.28 p.m.

Mr. Hugh Jenkins: The imposition of value added tax on the cinema has not hitherto attracted the attention that it should have had. Even when we discussed going into the Common Market, we debated mainly the consequences of doing so for the production end of the industry. At that stage


we did not discuss the incidental consequences of VAT, because the Government had adopted it in advance and it could have been said that they intended to introduce it in any case and that going into the Common Market was incidental to doing so. I take the view—and I believe that few would argue with it— that it is at least doubtful whether the Government would have adopted VAT but for their determination to go into the Common Market; the two are closely linked.
Be that as it may, when we discussed entering EEC we talked about the film production industry and we did not discuss the consequences of the impact of VAT on the film industry generally and particularly on exhibitors. Like my right hon. Friend the Member for Barnsley (Mr. Mason), I welcome this opportunity to talk about the imposition of VAT upon the cinema, which has not really been discussed.
We talked about the imposition of VAT on the theatre. The Chancellor of the Exchequer offered some hope. He said that if the consequence of imposing VAT upon the theatre would be to put companies supported by the Arts Council into difficulty, he would consider putting his hand in his pocket and reimbursing such companies through the Arts Council. That is a cack-handed and complicated way of going on. It astonished me that the Government should impose VAT on the theatre in such a way, but now I confess that I am no longer astonished about anything that the Government do.
The Government held out some hope to the supported theatre that there might be some reimbursement but denied the commercial theatre any possibility of reimbursement of VAT. I suppose that the Government regard the cinema as being in the commercial area and, therefore, bound to carry the impact of VAT in the same way as the commercial theatre. It will, incidentally, have the effect of recreating the old enmity which existed between the supported or subsidised theatre and the commercial theatre. I hope that my fears will not be realised, but already there are signs of considerable resentment among commercial theatre managers. They feel that the Arts Council will be put into a position which they will not enjoy.
The Government support indirectly the cinema as they support the theatre. Why do they feel that they must take action against the cinema?
I do not wish to give the impression that the regulations are unwelcome, as they provide that VAT will be payable by the cinema at 10 percent. instead of 11½ per cent. To that limited extent the regulations are a welcome measure. Most people in the cinematograph film industry will say that if the cinema is to carry VAT it should carry only the appropriate figure and should not be required to pay more than 10 per cent.
Why do the Government feel that the cinema should carry the tax at all? They do not take that view about books. Other Common Market countries do not find it necessary to exact a 10 per cent. VAT upon cinema attendances.
The House has recognised in the past that the cinema and the film industry have been going through a difficult time for many years. Attendances have been declining year after year. The cinema has for a long time been waiting patiently for the decline to iron out, but it has not done so. Attendances have gone down and down. The younger people are now the chief supporters of the cinema. People with families stay at home and look at television. Therefore, the imposition which is being placed upon the cinema will fall upon the pockets of younger persons who cannot sustain such a burden. The consequence of this measure will be that cinema attendances will undergo an even sharper decline. That is a consequence that cannot be welcomed.
Under pressure from both sides of the House, entertainment tax was removed from the cinema precisely because it was felt that the cinema could no longer carry that exceptional burden. In effect, by imposing VAT on the cinema, the Government are reimposing entertainment tax. It is no good their saying that it replaces purchase tax and selective employment tax, because the impact of both on the cinema was very small whereas the impact of VAT will be very much greater.
Therefore, for the tiny mercy of these regulations we say "Much thanks" but


we hope that the Government will think again and decide that there is nothing wrong, and nothing which other EEC countries have not done, in zero rating the cinema for VAT. I detest VAT and hope that it will disappear, but while it is with us, and while other EEC countries can zero rate the cinema and while we can zero rate books, there is no reason why we should not zero rate the cinema as well.
Obviously he cannot do so tonight, but I hope that the Under-Secretary will be able to tell us at a later date that, in view of the consequences of VAT on the cinema and the impact not only on exhibition but ultimately on production as well, the Government have decided that the game is not worth the candle and that VAT should be removed from the cinema altogether. Whether the tax will be carried by the industry or passed on to cinema-goers, and to what degree exhibitors will decide that they can carry it, time alone will tell, but I hope that the Government will soon conclude that the tax should not have been applied to the cinema and will remove it.

10.37 p.m.

Mr. Nicholas Ridley: I have always had great sympathy for an industry like the cinema industry, which is suffering a continuous decline. It causes problems of adjustment. It always means a reducing total return and reducing employment. It is in the nature of the industry, however, that it is declining. I do not think much will change that situation in the immediate future, as far as I can foresee, because of the impact of television and other form's of entertainment, particularly television, which has caused the decline.
But I think that the industry does itself no good to overstate the problem which value added tax poses for it. The right hon. Member for Barnsley (Mr. Mason) and the hon. Member for Putney (Mr. Hugh Jenkins) have made too much of this. I believe that it is quite right that VAT should be placed on the cinema, as indeed upon all entertainment. If I have any sympathy with the hon. Member for Putney, it is that VAT was not placed on books. Perhaps it should have been, but to destroy the universality of the tax and its coverage right across the board

and start making exceptions is the wrong way to look at it and will not do the raising of revenue any good—and that, after all, is an essential function of any tax.
I said that I thought the industry had overstated its case, as put through the right hon. Gentleman and the hon. Gentleman. First, the cost of a cinema seat includes not only the cinema but the distribution, processing and making of films. In these three processes there were considerable amounts of selective employment tax and some purchase tax, particularly in the making of films, which quite a lot of the articles bought by film producing companies must have borne. There is considerable saving to come from that direction.
Secondly, a lot of the materials bought for the making of films will carry VAT and this can be reclaimed as an input. To claim that the industry is faced with this straight 10 percent. increase is utterly wrong. It is misleading of the Opposition to give the weight of their authority to statements of that sort. The right hon. Gentleman went on to say that exports would be hampered. He ought to know that VAT is refundable on exports. The bulk of the industry's earnings, if it is to succeed and prosper, will come not from the British market but from the North American market. The only big cinema audiences left in the world today are in the United States.
We have the great advantage of sharing a common language. The opportunites for British film-makers are not, perhaps, great in the United Kingdom, but they are very much greater if we add to that the United States market. For the industry to be able to get a refund of tax on the biggest part of its market is a considerable opportunity which I did not hear mentioned by hon. Members opposite.

Mr. Hugh Jenkins: Will not the hon. Gentleman recognise, as the Chancellor has said, that the intention of VAT is that it shall be paid by the consumer? In so far as it is possible to absorb any part of the tax internally it will frustrate the intention of the Chancellor, who thoroughly intends that people going to the box office should pay an extra 10 percent. on the booking.

Mr. Ridley: I do not think my right hon. Friend intends that. We are talking
 


about the change from 31st March to 2nd April, or whatever date we choose. Without any great change, costs and other factors being equal, there is first the purchase tax and SET point. Secondly there are the inputs which will come through. They cannot be claimed as an extra. Thirdly, with a successful film probably nine-tenths of the proceeds come from overseas earnings. This would mean that there would be a considerable reduction in the tax paid on the firm as a whole. Any cinema which puts a straight 10 percent. on a successful British film in Britain would indeed be making much greater profits than before.

Mr. Mason: The right hon. Gentleman is right on production about the inputs, the production tax and SET. He is wrong about exhibitions. Is it a 10 percent. imposition on exhibitions and on the exhibition of films. It is not possible to claim that purchase tax and SET are neutralising factors. As for the export side, I said that it would affect the export of films because I fear that there will not be the same finance forthcoming for production. Therefore the quality of films will be lowered, and that will affect exports.

Mr. Ridley: I agree that there is little purchase tax involved. Certainly SET would have been payable. I would have thought it was a significant element in the cost. By far the greatest part of the cinema seat cost arises from the cost of making the film. As for exports and the financing of films, the financier will not be deterred by the thought that the price of a seat in Britain may go up by a few per cent. He will be interested in the prospect of the film selling worldwide, or in the European or American market. What will make for a better film will be its prospects of selling worldwide. It is the low-quality films which do not get the bookings on the American circuit or in the rest of the world, and it will be these failures which the financiers will wish to avoid. I do not agree that this will affect the financing of films. If plans are put to financiers for films which have the potential to sell on a large scale, they will be willing to put up the money.
To blame the imposition of VAT in Britain at a rate which will probably represent an increase of less than 10 per

cent. in the cost of a seat seems to be as far-fetched as one could go. I have no hesitation in supporting the imposition of VAT on films and in supporting these regulations.

10.45 p.m.

Mr. Joseph Ashton: The hon. Member for Cirencester and Tew-kesbury (Mr. Ridley) spoke with the orthodoxy and lucidity of an accountant, but he was talking about a business with a far greater art content than the normal commercial business. He seemed to think that all films make equal profits. That is not so. Some films make big profits. but most make very little and sometimes no profit. I wonder how many cinemas there are in his constituency. In Basset-law, where 100,000 people live in 300 square miles, there are just two cinemas. There are some 10-year-olds in my constituency who, living 15 miles from the nearest cinema, have probably seen a film only two or three times in their lives.

Mr. Ridley: First of all, I am not an accountant but I am an artist. Second, I do not think that there is one cinema in my constituency.

Mr. Ashton: Then it puzzles me why the hon. Gentleman should have spoken as he did. I am arguing that the cinemas should be kept alive, whereas the hon. Member is telling us what we always suspected about this tax: that it is designed to ensure that the righ get richer and the poor get poorer or go out of business altogether.
My hon. Friend the Member for Putney (Mr. Hugh Jenkins) said that Eady money is not payable by cinemas taking less than £500 a week. Of the 77 cinemas that closed in 1970–71, 73 were taking less than £500 a week. If we exempt them from the levy because they are not profitable enough, why do we have to impose this extra 10 percent. on the lame ducks? Of 1,452 cinemas, 650 were taking less than £500 a week and 73 ultimately closed. Today the figure is rising: 834 cinemas are taking less than £500 a week.
The one ray of sunshine on the horizon has been knocked on the head. Many large cinemas have each been converted into two or three small ones, thus producing a total of 116 new cinemas. This useful innovation gets around the Eady money obligation, since one large cinema
 


taking about £1,000 a week is replaced by two or three each taking £300 or £400 and thus they are not liable. At least this helps to keep the cinema alive and gives greater choice. The tax will have the opposite effect and will be spread more widely on these people.
At the breadline level just above that at which Eady money becomes payable —that of £700 or £800 a week—two-thirds of the existing cinemas are in jeopardy, especially in small urban or rural areas, above all in the poorer areas, where people are trying to keep a cinema alive not because it is part of the ABC or Rank chain but because it has been there all their lives and is part of their environment.
There is an ever-decreasing spiral, with fewer and fewer films making less and less money. So the number of imported films rises and, because they attract a less desirable type of client to the cinema, we get more permissive films, made on a cheaper basis. The Home Secretary says that many of the cinema clubs must be made to control their advertising, because it is an undesirable feature of the social scene, yet these clubs are growing while the legitimate cinema is declining.
No doubt to the Department of Trade and Industry an industry which earns only £34 million annually abroad is not very significant, but there is great value in the prestige those films earn for this country and the tourism they generate. The spin-off is greater than if we were selling £34 million worth of steel. These factors cannot be measured and should not be limited by the imposition of a 10 per cent. tax. If this view were generally accepted, other countries would not regard films as an art form.
I shall not read out the figures as my right hon. Friend the Member for Barnsley (Mr. Mason) gave them earlier; he may have had the same figures from the Film Producers Association. In France, Italy, Germany, Denmark and Ireland it is accepted that there is some artistic or educational content in the film producing business, just as there is in books and newspapers, and some concession is given as a result.
Another long-term aspect is the anomaly of VAT. That tax is not levied

on BBC licences for television, much of which consists of old films. In about 10 years we will have a situation in which the number of films which can be shown on television in this modern society will have decreased, yet this ever-increasing burden is put on the film industry without any similar burden being placed on television.
I hope that the Minister will be able to examine some of the points we have made in this debate and that by the time of the next Budget the Government will give some sort of concession, otherwise we will get more and more of the "Carry On" and "On the Buses" series which are sure-fire winners for one or two cinemas in the big cities, but the small cinemas catering for select audiences will continue to have to carry this burden. I should very much like to see a change in Government policy in this respect.

10.52 p.m.

Mr. Anthony Grant: Although it is probably outside the range of the regulations to do so, perhaps I may make a few observations on VAT and the film industry generally. It is true that the industry made representations on the imposition of VAT. I myself saw the Cinematograph Films Council, and my right hon. Friend the Chancellor of the Exchequer listened extremely carefully to the case it made. My right hon. Friend was, however, unable to make a concession on VAT. I agree entirely with my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) who made the fundamental point that the more concessions we give in this respect and the greater the inroads we make into the VAT system, the more burdensome it becomes for the remainder and the less fairly it operates.
The right hon. Member for Barnsley (Mr. Mason) referred to the operation of VAT in European countries. We have decided on a single rate of VAT whereas those other countries have differential rates. In some countries the cinema is subject to a rate of VAT below the maximum. Both in terms of taxation and of aid to the industry one must consider the systems as a whole. We have our own support systems, now longstanding, including this levy, and one should not consider them or consider this levy in complete isolation. It has been the


policy of successive Governments to continue these systems of support, and in this case the levy has played a significant part in placing British films, in the pre-eminent position in the world they now enjoy.
My right hon. Friend the Chancellor having made his decision, I can assure the House that the film industry is by no means as pessimistic as some hon. Members would have us suppose. Those in the industry, having made their representations, are now getting down to the problem of adapting themselves to the new circumstances. It is true that the industry has been going through a period of change for a number of years. Television is one factor, but there are other reasons for the change in public taste. I find now that there is a very strong feeling of buoyancy in the industry in the changed circumstances. There are different patterns of cinemas. There is a new style of two-tiered and three-tiered cinemas increasingly coming into evidence to meet the changing patterns.
I accept that the closures of cinemas has led to some parts of the country being isolated from the cinema. This is in accordance with natural trends, however, and people wanting to go to the cinema are prepared to travel further to do so. But I do not accept that anything which has happened has led to a lowering of standards in film making. Some of the films made in Britain today can compete anywhere in the world. As for our joining the EEC, the film industry not only welcomes our entry but feels confident that it can compete. I am certain that it can because I have always maintained that we have the best artists and technicians in the world. This is a factor which can make us really optimistic for the future, provided that we are as confident as the film industry is.
The right hon. Member for Barnsley asked a specific question about the amount of the levy. The total yield reached has been roughly between £4 million and £45 million in some years past. In the levy year ending October 1972, it amounted to £4·3 million. It is a little early to predict with accuracy what the yield might be in the current year. The figures to date are very slightly down on last year. However, the final yield should not show a significant drop.
The regulations are required only to preserve the balance between the various sections of the industry following the changeover to VAT. I believe that they do justice in that respect.
I do not go along with the gloomy forebodings of the right hon. Member for Barnsley about the provision of finance or about the future of the cinema as a whole. I agree with the hon. Member who said that the film industry is quite different from any other. It is. In some ways it is the flag of one's country. It is an industry of which we can be very proud. I believe that it will continue to export successfully throughout the world and that its name will continue to have the influence that it has had in the past and that it will have even more in the future.
The right hon. Member for Barnsley asked me to keep the trend constantly under review. Most certainly that will be done. I am in constant touch with the industry. But I should be doing less than my duty if I left the House with the impression that the film industry is in the depressed state which some of the speeches have portrayed. It is not. It is buoyant. It is a great industry with a very important future before it. As some contribution to that future, I hope that the regulations will be approved.

Question put and agreed to.

Resolved,
That the Cinematograph Films (Collection of Levy) (Amendment No. 3) Regulations 1973, a draft of which was laid before this House on 26th March, be approved.

Orders of the Day — MOTOR VEHICLES (SPEED LIMITS)

10.53 p.m.

The Under-Sccretary of Slate for the Environment (Mr. Keith Speed): I beg to move,
That the Motor Vehicles (Speed Limits on Motorways) Regulations 1973, a copy of which was laid before this House on 29th March, be approved.

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. It will be convenient if we discuss the two sets of regulations together.

Mr. Speed: I agree that that will be very helpful, Mr. Deputy Speaker. In
 


that event, we can discuss at the same time the second motion,
That the Motor Vehicles (Variation of Speed Limits) Regulations 1973, a copy of which was laid before this House on 29th March, be approved. i
These are complex regulations. They deal with the maximum speed limits for certain specified classes of vehicles set out in Schedule 5 to the Road Traffic Regulation Act 1967. Under Section 78(2) and (4) of that Act, the Secretary of State for the Environment may, by regulation subject to the approval of each House of Parliament, vary the speed limits. Schedule 5 to the Act, as amended by the Motor Vehicles (Variation of Speed Limits) Regulations 1971, sets out the limits currently applying to the specified classes of vehicles on roads generally. Also under Section 78 of the 1967 Act, the Secretary of State for the Environment made the Motor Vehicles (Speed Limits on Motorways) Regulations 1971 which have the effect of substituting as respects vehicles driven on motorways a different schedule of speed limits from that applicable to vehicles on roads generally.
The first set of regulations for which approval is sought substitutes two new paragraphs for paragraphs 1 and 2, as amended, of the 1967 schedule, so making the following changes in speed limits applying on all-purpose roads. The speed limit for certain private cars, dual-purpose vehicles like Land Rovers and light vans, when drawing one trailer, is increased from 40 m.p.h.—or 30 m.p.h. in certain cases—to 50 m.p.h. if certain specified conditions are complied with or if the drawing vehicle is a visiting foreign vehicle. If the conditions are not complied with and the drawing vehicle is not a visiting foreign vehicle, the speed limit of these vehicles, when drawing one trailer, is to be 40 m.p.h., which on further consideration is considered to be more appropriate than the 30 m.p.h. limit proposed in the draft regulations circulated for comment.
The conditions which have to be observed in order to travel at 50 m.p.h. the right hon. Gentleman will agree that and on certain kinds of trailer their respective weights are displayed, that a plate bearing the number "50" is displayed on the rear of the trailer and that

a certain ratio between the weight of the drawing vehicle and the weight of the trailer is observed.
Two changes are made to remove minor anomalies. First, the speed limit for passenger vehicles not exceeding 30 cwt. unladen which are adapted to carry more than seven passengers but are not licensed as public service vehicles is raised from 40 m.p.h. to 50 m.p.h., in line with that for goods vehicles of similar weight; and second, the limit for motor cycles when drawing a trailer, which at present is 40 m.p.h. if the cycle is a goods vehicle and 30 m.p.h. if it is a passenger vehicle, is fixed uniformly at 30 m.p.h. The regulations will, in particular, enable caravans to be towed at 50 m.p.h. if the conditions are satisfied. At present, as the House is aware, they are restricted to 40 m.p.h. and in many situations, as we all know to our cost, they are the cause of congestion and frustration which can lead to injudicious overtaking and accidents. Increasing the speed limit for these combinations should go a long way to overcoming this potential hazard, while the condition as to weight ratio between the towing vehicle and the trailer has been designed to ensure that the increase in speed is achieved without the danger which could arise if the two were not suitably matched in weight.
The requirements to display the weights of the vehicle and of the trailer and the "50" plate are needed generally to assist the enforcement of the regulations but are not applied in the case of the visiting foreign vehicle which in practice could not be expected to comply with such requirements.
The effect of the second set of regulations for which approval is sought is to raise from 40 mph to 50 mph the speed limit on motorways for vehicles towing trailers with less than four wheels or with four close-coupled wheels, provided that if the towing vehicle has an unladen weight not exceeding 30 cwt. the increase in speed limit is subject to compliance with the same conditions relating to display of weights and of a "50" plate and to observance of a weight ratio as are specified in the Motor Vehicles (Variation of Speed Limits) Regulations 1973.
With that brief and, I hope, clear introduction of a rather complex subject, I hope that the House will now approve the two sets of regulations.

11.3 p.m.

Mr. Tom Bradley: The House will be grateful to the Minister for his very clear explanation of what, as he indicated, is a rather involved subject. I understand that this matter has been the subject of very long discussions and consultation with the interested parties. Indeed, one could go as far as saying that for the caravan interests it has been rather too long a period of time. For that reason, it is rather a pity that these regulations could not have been brought before the House somewhat earlier.
I understand that the regulations will not be enforced until after the Easter weekend, and that, I would have thought, will be a great disappointment to all caravan users. I suppose that we can only regard that as a characteristic oversight of the present Government concerning the convenience of this section of the public.
Nevertheless we on this side have no wish to impede the implementation of these useful regulations, which I am sure will be widely welcomed.

Question put and agreed to.

Resolved,
That the Motor Vehicles (Speed Limits on Motorways) Regulations 1973, a copy of which was laid before this House on 29th March, be approved.

Resolved,
That the Motor Vehicles (Variation of Speed Limits) Regulations 1973, a copy of which was laid before this House on 29th March, be approved.—[Mr. Speed.]

Orders of the Day — ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fortescue.]

Orders of the Day — MAGISTRATES COURTS' (SOCIAL INQUIRY REPORTS)

11.6 p.m.

Mr. Edmund Dell: The question which I wish to raise tonight is not one on which I wish to emphasise any policy disagreements. Successive Governments have accepted the principles outlined in the Streatfeild Report about the need for the courts to have adequate information before sentencing. Home Office circular 188 of 1968 defined the

circumstances in which, as a normal practice, magistrates' courts should consider a social inquiry report. These circumstances included any sentence of imprisonment on a woman and a sentence of imprisonment on a man not previously sentenced to prison or borstal. The substance of the 1968 circular was repeated in 1971.
The Home Secretary has said that he wants to reverse the upward trend in the prison population, to ensure that imprisonment is used only where it is unavoidable in the interests of society. He wants the courts to use the alternatives to imprisonment, new and old, wherever possible. The principal means now open to him to influence the courts towards the use of alternatives to imprisonment is the social inquiry report.
There is evidence that magistrates usually accept recommendations made by probation officers in their social inquiry reports. By ensuring that social inquiry reports are provided when sentences of imprisonment, especially of first imprisonment, are under consideration, two things are achieved. First, courts will not imprison in the absence of relevant information. Second, courts will receive expert advice on the appropriateness of the various non-custodial alternatives.
Therefore, it is not policy that I want to discuss tonight but the Home Office's administration of its own policy, the policy I have just described. Here I detect an ineptitude which passeth all understanding. Unfortunately, within the procedures of the House we have no administrative audit of Government unless finance is involved. If the administrative processes of the Home Office in in pursuit of its own policies were subjected to audit in the same way that its expenditures are, I am sure that a Committee of the House would long since have called forth fire and brimstone upon it.
The administrative story begins with Section 57 of the Criminal Justice Act 1967. The power under Section 57 to make rules as to the use of social inquiry reports was not used. Instead, circular 188 was issued. There are many difficulties about Home Office circulars. They are not the law. It is open to the courts to disagree with them. For example, the courts might believe that probation officers' time would be better
 


employed than in preparing reports in the circumstances covered by the circular. As my noble Friend Lord Gardiner has pointed out, in order not to appear to interfere with the independent status of the magistrates—independent of the executive—the circulars go not to the magistrates themselves but to the clerk of the court. The clerk may draw them to the attention of the magistrates. He may put his own gloss upon them. He may ignore them. In any case they are likely to be soon forgotten.
I quote from an article which appeared in The Times, which seems to summarise the position:
Circulars long and short, lucid and obscure, gentle and sometimes emphatic, follow one another in endless succession. But circulars, even when they come from the Home Office, are not always read. Nor, when they are read, are they always understood. Magistrates and judges are busy and often overworked … Consequently the words of wisdom … fall on barren soil and things go on just as before, while the public pays for the printing, and the keen earnest men at Whitehall sigh, and perhaps something more, at the futility of it all.
That is from an article published in The Times in 1910.
The circular system seems to remain very much what it was. Recently, however, I have observed that, perhaps again in order not to impinge on the independent status of the justices, the Home Office has taken to writing its circulars in a kind of cringing and apologetic language which undermines whatever effect they might have had.
For example, under pressure during the passage of the Criminal Justice Act 1972 the Home Office agreed to send out a circular commending to the courts the Widgery criteria on the granting of legal aid. The circular, dated 19th December 1972, said:
It is the Secretary of State's understanding that these criteria are being generally followed.
The Secretary of State cannot possibly understand anything of the sort. One of the criteria was that legal aid should be available for those given custodial sentences. On the previous 23rd November Michael Zander had published the results of a survey showing that over 80 percent. of persons sentenced by magistrates to such sentences were unrepresented.
Again the Home Office memorandum on the Criminal Justice Act, after re-

commending the use of social inquiry reports in cases covered by Section 14— that is, cases where a first sentence of imprisonment is imposed—goes on to say that the
Secretary of State acknowledges the practical problems in the way of adoption of the practice that at present exist in some areas.
As he did not define the areas or the problems, and declined to do so when I put down a Question, the Secretary of State is simply providing the courts with a generalised excuse for ignoring his memorandum.
What was the effect of the 1968 circular? The Home Office of course did not know one way or the other. When in December 1971 I asked Questions about the use of social inquiry reports in the categories covered by the circular, I was told that the Home Office had no information. This ignorance did not prevent the Minister of State telling me that
In general, the arrangements recommended in the 1968 circulars appear to be working satisfactorily."—[OFFICIAL REPORT, 8th December, 1971; Vol. S27, c. 320.]
As so often happens with the Home Office, all this ignorance added up to a feeling of considerable but quite unjustified satisfaction.
In the course of debate on the Criminal Justice Bill in 1972, the Minister of State promised to investigate the efficacy of the circular and told me that, if he found it was not working, the Home Secretary would consider making rules under Section 57. By the summer of 1972 we at length knew that the circular was working anything but satisfactorily. A November 1970 sample of offenders taken by the Home Office had, when examined, yielded information about this subject. The situation was shown to be appalling. The figures, first given in another place, were also provided in answers to me on 26th July and 8th August 1972. Social inquiry reports had been considered by the magistrates' courts in only 44 percent. of cases involving men receiving a first sentence of immediate imprisonment and 72 percent. of women receiving a sentence of immediate imprisonment.
In inner London the position was substantially worse even than that. At least the satisfaction disappeared from the voices of Home Office Ministers. Viscount Colville referred to these facts
 


in another place, although his remedy was hardly reassuring. He said:
we should draw the attention of the courts to this very sad situation and go on with our administrative pressure and our exhortations. … "—[OFFICIAL REPORT, House of Lords, 17th July, 1972; Vol. 333, c. 567.]
We were then four years from the 1968 circular. Obviously it was being largely ignored.
What then was to be done? The Minister of State told me on 8th August 1972 that the Secretary of State would be considering
 in consultation with representatives of magistrates and the probation and after-care service, the implications of the recently completed survey."—[OFFICIAL REPORT, 8th August 1972; Vol. 842, c. 364.]
Knowing the Home Office's normal speed of work, I left further questioning for six months and then, on 8th February 1973, asked what those consultations had shown and what action was to be taken. The Minister of State then told me that a consultative document was about to go to the secretaries of a number of probation and after-care committees. In other words, a further six months had been wasted in a matter of considerable importance and urgency if the prison population is to be kept from growing unnecessarily.
Then on 23rd February 1973 the consultative document actually went out. It will cause at least a further six months' delay for little benefit by way of additional knowledge about the problem. The kind of information it asks for could as easily be supplied in one afternoon's telephone calls to selected probation officers and courts in different parts of the country. Instead of making a serious attempt to investigate the reasons for non-compliance, the document simply asks for views.
The nearest thing to figures that is asked for is a tentative "suggestion" that the courts should keep for eight weeks a record of cases where they "decide to dispense" with reports. This begs the question whether the magistrates "decide to dispense" or whether most of them, unprompted, are entirely ignorant of the circular.
The Minister has told me that the inquiry

 is not intended to be a statistical survey in controlled conditions".—[OFFICIAL REPORT, 19th March 1973; Vol. 853, c. 28.]
In other words, busy people are asked to spend their time collecting statistics when it is admitted in advance that the material will have little statistical value: there will be no total figure of those covered by the survey because it has not been asked for; there will be no way of knowing how complete the returns will be; there will be no uniformity in the kind of information supplied because no uniform pattern of response has been laid down. The Minister had promised me in an answer on 8th February 1973 that the survey would show the extent of compliance with the circular. It will not do so because the necessary information is not asked for.
Above all, the consultative document lakes no account of the fact that one of the most likely reasons for non-compliance is ignorance. I quote the words of a probation officer who wrote to me about this subject in January 1972:
I am sure that the large majority of magistrates … are completely unaware",
of the circular. The nature of the consultative document makes it impossible to investigate this aspect of the question, which happens to be both important and to bear on the general question of the utility of circulars.
When Section 14 of the Criminal Justice Act 1972 was introduced, the Minister suggested that it would mean that, as a rule, social inquiry reports would be provided for those who might be given a first sentence of imprisonment. There is no reason to think that this will happen now any more than it happened following the First Offenders Act from which the relevant words of Section 14 are taken. Such evidence as existed showed that the majority of cases falling within the ambit of the First Offenders Act who were sent to prison were sent without the benefit of a social inquiry report. We have no reason to think that anything different will happen following Section 14 unless the Home Office takes effective action.
I accept that there has been one significant change in the situation since 1968 —Section 37 of the Criminal Justice Act, introduced by the Government at the eleventh hour. But the availability of a last-minute lawyer to help a convicted
 


person before sentence is no substitute for a social inquiry report, and the Home Office accepts that it is no substitute.
The whole story is one of Home Office dilatoriness and unwillingness to take effective action. I know that probation officers are hard-worked, but the additional numbers required to carry out Home Office stated policy would not be great, and in any case it is a question of priorities. If Home Office Ministers want to keep people out of prison wherever possible, as the Department says it does, it will have to give the making of social inquiry reports the necessary priority. It is a curious conception of priority which allows a man to be sent to prison without proper investigation— with all the effects which that has, including on his family, who are only too likely to become dependent on social security.
If the Home Secretary really wants to live up to the ambition which he declared in his NACRO speech, he will accept responsibility and at long last take effective action. In my judgment, effective action is likely to mean making rules under Section 57 of the Criminal Justice Act 1967.

11.19 p.m.

The Minister of State, Home Office (Mr. Mark Carlisle): I know how assiduous the right hon. Member for Birken-head (Mr. Dell) is in pursuing the matter of the use by magistrates' courts of reports by probation officers on the circumstances of the offenders who come before them. He pursued it in the debates on the passage of the Criminal Justice Act last year, and he has returned to it on many occasions through Questions. I go a long way with the right hon. Gentleman: it is certainly the Government's intention, as expressed by my right hon. Friend the Home Secretary, to keep people out of prison wherever that is possible.
As the right hon. Gentleman claims always to be extremely accurate with his figures, I should like to comment on what he said today about our failure to implement what was required with regard to social inquiry reports and about the continual increase in the prison population which this would cause. In fact, the prison population is 2,500 fewer now than in 1970. Therefore, perhaps the record

of the Home Office in this respect is not as bad as the right hon. Gentleman always suggests. However, that is one aim.
I agree that it is important, as the right hon. Gentleman has often said, that, consistent with other demands on the available resources of the probation service, the criminal courts should be given information about offenders appearing before them and should certainly have information about anyone they propose to send to prison, particularly when it is for the first time, and that they should make use of that information. About that there is no difference between the views of the right hon. Gentleman and those of the Government.
We differ in two ways. First, in all these matters the right hon. Gentleman always believes that the best method to move is by way of dictation or direction to the court, whereas I believe that on the whole the best use of these powers by the court is on a basis of discretion and encouragement, rather than a rigid and inflexible system. Although it has nothing to do with this debate, that may be similar to the difference between us on the issue of suspended sentences.
I do not believe that always requiring the court to adjourn a case for the purpose of receiving a report when the court is satisfied as to the manner in which it will deal with an individual is necessarily the best way in which to preach the importance and usefulness of reports. Secondly, I believe that we must keep a balance between the probation services commitments to the preparation of reports and its primary function of supervising offenders placed on probation.
The right hon. Gentleman said that all this was a matter of priorities, and of course I agree. Undoubtedly in a perfect world, where there were no constraints on resources, one would wish to see a situation in which in every case, other than the most trivial, coming before a magistrates' court, just as happens today with the Crown courts, there would be a pre-trial probation report. But we have to deal with the situation as it now exists.
The fact remains that we have to consider priorities. Despite all that the Government have done to encourage an increase in the size of the probation service—and I believe that the present Government have done more to increase the
 


size of the probation service than has been done by any previous Government —that service remains under heavy pressure in some areas and new demands upon it are generated both by the greater use of existing functions and by the new functions imposed upon it by the Criminal Justice Act. The need to provide social inquiry reports for the courts must be weighed against those other factors.
Much of the recent growth in the demand on the service over recent years —one might say a major growth point in its work—has been in the provision of pre-trial or pre-sentence reports for the courts. In 1965 social inquiry reports were prepared in 43,456 cases of adults appearing in magistrates' courts. In 1968 that figure was 66,000, in 1970 it was 91,335 and in 1971 it was in the region of 94,000. Clearly the use of social inquiry reports in the magistrates' courts has increased substantially over recent years. If we consider that 94,000 reports on adults in magistrates' courts were prepared in 1971, and that there were 33,000 receptions into prison without the option of a fine, of which 18,000 were known to be on a second prison sentence, it is to be noted that the volume of reports prepared far outweighs the number of sentences of imprisonment imposed on individuals in the magistrates' courts.

Mr. Dell: The hon. and learned Gentleman used exactly the same argument in Committee. He subsequently found out the appalling figures, which he then had to publish.

Mr. Carlisle: I agree that the figures are disappointing. I am saying that there is steadily becoming a wider use of the reports in the magistrates' courts. That is shown by the figures which I have quoted. It is reasonable to compare the number of reports prepared with the number of persons sentenced to imprisonment. Maybe in many cases the magistrates' courts consider imprisonment and decide not to impose it.
The trend which I have described started in the higher courts in 1971 with the Streatfeild Committee report. I think the right hon. Gentleman will agree that what happened during the passage of the Criminal Justice Act, 1967 was that an amendment was moved by the late Sir

John Hobson, a previous Conservative Attorney-General, which asked for what the right hon. Gentleman has persistently asked for during the course of the 1972 Act, and that this was resisted by the last Labour Government—namely, the requirement that no one should go into custody for the first time without the preparation of a social inquiry report.
In the place of such an amendment Lady Bacon, the then Minister of State, moved what is now Clause 57 of the 1967 Act, giving a rule-making power. During the course of the debate she said that rather than use the rule-making power conferred by the provision, it might prove more expedient to send circulars to the courts recommending them to obtain social inquiry reports in specified classes of case.
I accept the right hon. Gentleman's quotation from The Times of 1910 about the note that the courts take of Home Office circulars. However, I am sure he will agree that it is a delicate line which the executive has to take when sending circulars or advice in the form of memoranda to the judiciary. We must remember the importance of the tradition of powers in this country. I am sure the right hon. Gentleman realises that we must be careful of the way in which the executive attempts to impose its views on the judiciary.
The last Labour Government sent out the circular to which the right hon. Gentleman has referred which set out the circumstances in which the Home Office believed that a social inquiry report should be drawn.
Then, as the right hon. Gentleman has said, we come to the Criminal Justice Act 1972. When we were debating what is now Section 14 of that Act, imposing a new condition on the courts so that a court cannot send to prison anyone who has attained the age of 21 but has not previously been sentenced to imprisonment unless it feel that there is no other appropriate method, and for that purpose obtains information on the circumstances, taking account of any information before the court relevant to the character and physical and mental condition of the defendant, the right hon. Gentleman moved an amendment specifically calling for the inclusion of a social inquiry report.
In resisting that amendment, I made two points. First, I concede that I said that the courts were usually using these reports and, secondly, that Section 14 would require information to be statutorily required, which would normally mean going for a social inquiry report. That section, together with Section 37. has only recently come into force, and I have no doubt that those two sections are aimed at, and will certainly succeed in giving greater emphasis at the moment of time when magistrates' courts may consider it necessary to send a person to prison for the first time, by drawing specifically to their attention the statutory requirement to obtain information about that person. I said in the debate that we would make what inquiries we could to see whether the terms of the 1968 circular were being carried out.
The right hon. Gentleman has mentioned the figures tonight. I shall not go into them again and take up time. I concede that they show that reports were not used in magistrates' courts as substantially as I had indicated. They were used in about 37 per cent. of cases in which a man received a first sentence of imprisonment. The use of the reports was not as substantial as I had led the right hon. Gentleman to believe was the view of the Home Office, and it was that that put us further upon inquiry.
It was upon receipt of that information that it seemed to us in the Home Office that we should go further into this problem and deal with it not as the right hon. Gentleman wished us to do—by further statistical surveys—but by way of

inquiry into the problem with the cooperation of the magistrates, their clerks and the probation service, to find out why these reports had not been used as often as I had imagined. It was for that reason that in February of this year we sent out the circular to which the right hon. Gentleman referred, to try to discover the reasons—whether staff shortage, the information that is required in probation reports or the need for an adjournment after conviction. I know that the right hon. Gentleman says that this was not an accurate statistical analysis. It was not intended to be. It was an attempt to find out, with assistance, the causes for the shortfall in the figures.
I can tell the right hon. Gentleman that as a result of this inquiry we are having the situation looked at over a period of eight weeks starting in April of this year, and we shall have to bear in mind what further steps will be necessary. I stand by what I said in the debate in Committee.
We believe in a wider use of information about offenders before sentencing, in the form of social inquiry reports. We want to see them widely used, and we believe that the Act will assist in achieving that. We shall look with interest at the result of our survey and we shall consider whether in any further steps that are required we need to move by encouragement rather than edict.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes to Twelve o'clock.